Taiwan’s Ministry of Economic Affairs has cleared a fresh $20 billion investment by TSMC into its Arizona operations, bringing the total authorized outlay for the US project to $44 billion. The decision, announced Thursday by the ministry’s Investment Review division, marks the sixth such green light for the chipmaker’s American expansion. Yet the island’s economy minister was quick to underline that the US will not overtake Taiwan’s production capacity — TSMC plans 16 fabs and state-of-the-art chip-on-wafer-on-substrate packaging plants at home, keeping the heart of its manufacturing firmly in Asia.
The new capital will be directed toward a 12-inch wafer fabrication plant and an advanced packaging facility in Arizona. TSMC is racing to build capacity outside its home base in response to surging demand for artificial intelligence hardware, but the ministry’s message was clear: Washington’s push to strengthen domestic chipmaking will not diminish Taiwan’s strategic importance for the foreseeable future.
Investors welcomed the news, sending the stock up 4.21% on Friday to close at €396.00. The shares now sit less than 6% below their 52-week high of €420.50, reached on July 1, and have nearly doubled over the past twelve months. Year-to-date, the gain stands at 45.05%, while the stock trades 36.70% above its 200-day moving average — a clear signal of the steep uptrend in recent months. Chart watchers point to the 50-day line at €363.12 as a key support that, if held, would keep the rally intact.
Should investors sell immediately? Or is it worth buying TSMC?
The growth engine is unmistakable: artificial intelligence. Some 74% of TSMC’s revenue now comes from chips built on 7-nanometer nodes or smaller. With an estimated 75% share of the global foundry market, the company wields enormous pricing power, and market reports indicate it plans to raise prices on advanced nodes by 5% to 10%. That leverage is feeding through to earnings expectations: analysts see EPS climbing by nearly half to $15.80, while capital expenditure for 2026 is projected to reach $56 billion to keep pace with the AI buildout.
Competitive pressure is building, however. Rumors have surfaced that Meta could shift some orders for new AI chips to Samsung, which is positioning its 2-nanometer process as a rival. Apple, for its part, remains loyal to TSMC. Investment bank Goldman Sachs notes that hedge funds continue to overweight AI beneficiaries, with TSMC at the center of that megatrend.
Management’s outlook for the second quarter of 2026 calls for revenue between $39 billion and $40.2 billion, with an operating margin of 56.5% to 58.5%. While the overseas expansion and the development of 2-nanometer technology could temporarily pressure gross margins, the longer-term rationale is to reduce geopolitical risk and secure TSMC’s technological lead. For now, the market is betting that the pricing power and AI tailwind will more than compensate.
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