Recent geopolitical developments and shifts in demand are causing TSMC to rebalance its investment strategy. The company has responded to growing pressure from the Trump administration to onshore its manufacturing by accelerating the construction timelines for its upcoming U.S. fabs by as much as six months. Conversely, in other parts of the world, a TSMC fab in Japan is now underperforming, and a second under construction is facing delays. A contracting German auto sector may slow further TSMC investments in Europe, according to a report by Digitimes.

However, while U.S. investment from TSMC is certainly ramping up amidst growing demand for chips, Taiwan remains the company’s heartland, with four of the current nine under-construction new fabrication plants being based in the East-Asian territory. This underlines the continued importance of U.S. strategic initiatives in the region, considering ongoing posturing from the ruling Chinese party about Taiwanese reunification.

More phases, faster

TSMC has been a prolific fab-plant builder and investor in its global operations for years, consistently building multiple new chip manufacturing facilities every year. In 2025, it listed a total of nine new facilities as under construction (though some began in 2024 and others are actually starting operation, rather than starting construction).

The Fab 21 site near Phoenix, Arizona, is listed as two separate facilities, and it will produce different TSMC silicon. The N3 plant is in the equipping phase, while the A16 and N2 process production facility entered construction in April this year. That construction is now expected to accelerate, with TSMC saying it has brought its completion date forward by six months.

As part of this initiative, TSMC is investing a further $100 billion in American fabrication, bringing its total investment into the U.S to a total of $165 billion, which was announced in Early March. These will come online over the next few years, allowing for the US-native production of more advanced process nodes by 2030.

With wafer production prices set to increase dramatically for next-generation process nodes, local production may help keep costs down for TSMC silicon customers with thin margins. However, chips produced at Arizona’s Fab 21 are still expected to command a pricing increase when compared to chips manufactured in Taiwan, though the exact relative price increase isn’t entirely clear.

TSMC runs into issues in Europe and Asia

TSMC’s demand-based investment strategy in the U.S. may see an inverse reflection in other territories, as slowing economies weigh on construction plans. In Japan, TSMC’s Kumamoto Fab 1 facility is struggling to reach production targets since coming online, and local infrastructure and “community impact” have allegedly delayed the construction of its Fab 2 facility. There are rumors, however, that this could be a scapegoat, with TSMC instead concerned about the long-term profitability of such a facility.

By: DocMemory
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