Taiwan Semiconductor Manufacturing Company Ltd. (NYSE: TSM) is making substantial progress in enlarging its U.S. manufacturing presence through a major buildout in Arizona. Yet, analysts caution that the shift of its most advanced semiconductor fabrication capabilities to the U.S. will remain limited within the current presidential term. According to economist Lien Hsien-ming, president of the Chung-Hua Institution for Economic Research, the relocation of advanced manufacturing processes from Taiwan to the United States is projected to be less than 15% by the conclusion of President Donald Trump's second term in office.
This observation contrasts with statements made by U.S. Commerce Secretary Howard Lutnick, who articulated a governmental objective to relocate 40% of Taiwan Semiconductor's supply chain to the U.S. before 2029. Lien’s detailed analysis, conveyed in a Facebook post and reported by Focus Taiwan, emphasizes that existing construction schedules and operational timelines make this ambitious target highly improbable within the specified timeframe.
Arizona Development Progress
The pace and scale of the Arizona investment form the core of Taiwan Semiconductor's U.S. manufacturing expansion. The company has committed approximately $65 billion to develop three fabrication facilities in the state. Additionally, it has pledged an extra $100 billion towards the establishment of three more fabs, alongside two integrated circuit assembly plants and a research and development center within the U.S.
Within this program, Taiwan Semiconductor has initiated the installation of semiconductor manufacturing equipment at its second Arizona fab. This facility is slated to commence mass production in 2027. Construction activities on the third fab started earlier in the current year. The company also seeks permits to build a fourth fabrication plant, but industry estimates imply that full-scale mass production in either the third or fourth fabs will not begin before the end of President Trump's term.
Trade Agreements and Land Acquisition Bolster Expansion Strategy
Despite the temporal limitations of production startup at new fabs, Taiwan Semiconductor is advancing steadily toward its broader U.S. manufacturing ambitions. A recently signed trade agreement between Taiwan and the Trump administration has played a crucial role in facilitating this acceleration. Under the agreement, tariffs on Taiwanese goods have been reduced to 15%, coupled with a commitment of $250 billion in planned Taiwanese investment in the United States and an equivalent amount in credit guarantees. These measures are enabling the company to pursue a robust industrial footprint in Arizona.
The company's U.S. strategy emphasizes building a substantial "gigafab cluster" centered in Arizona. To support this, Taiwan Semiconductor has strategically expanded its land holdings. Beyond the initial 1,100-acre site originally acquired, the company has secured an additional 900 acres to maintain flexibility for future development and scaling opportunities.
Market Response and Stock Performance
Taiwan Semiconductor's shares traded higher in premarket sessions on Wednesday, rising by 1.23% to $331.17. This price level approaches the stock’s 52-week high of $351.33, indicating positive market sentiment toward the company’s ongoing strategic initiatives. The stock performance reflects investor interest amid a focus on semiconductor supply chain developments, particularly relating to U.S. production capabilities.
Outlook Summary
While Taiwan Semiconductor continues to invest and build a significant manufacturing presence in the United States, especially in Arizona, the expansion of advanced chipmaking capacity is constrained by construction timelines and regulatory factors. Therefore, the relocation of sophisticated production processes will remain a modest proportion of the company’s overall output by the end of the current presidential administration. Nevertheless, policy support via trade agreements and substantial capital investments indicate a strategic commitment to establishing a durable U.S. manufacturing base.