TSMC is weighing a new chipmaking campus in Texas that would add tens of billions of dollars to the US$265 billion it has already committed in Arizona, according to people familiar with the plans.

The envisioned Texas project would involve multiple fabrication plants, each costing at least US$20 billion, one of the people said. The plans remain at an early stage, the people cautioned, and they asked not to be identified because the details are not public. Taiwan's Economic Daily News first reported TSMC's consideration of Texas earlier this week.

The world's dominant contract chipmaker and key supplier to Nvidia and Apple is exploring further overseas capacity to handle unrelenting demand for artificial intelligence hardware. The company has had to roughly double its planned equipment purchases over the past year to keep up with that demand, deputy co-chief operating officer Cliff Hou said last month.

North American customers account for more than 75 percent of TSMC's wafer revenue so far this year, and AI silicon designers such as Nvidia and Advanced Micro Devices place huge orders for some of its most advanced process technology. That demand has strained TSMC's existing capacity.

A Decision Tied to Washington

The potential Texas investment is contingent on US legislators extending an advanced-manufacturing tax credit set to expire at the end of this year, one of the people said. The credit was a cornerstone of former president Joe Biden's 2022 Chips Act; lawmakers increased it to 35 percent and extended it last year. An extension has yet to find a viable path to passage this year, but Senator Mike Crapo, an Idaho Republican, and Senator Ron Wyden, an Oregon Democrat, have said they are committed to it.

Texas already holds a significant semiconductor base. Samsung Electronics operates an extensive production complex there, and Elon Musk is developing his Terafab project in the state to supply chips for his business empire.

Singapore in the Running

Texas is not the only site under review. TSMC has also held conversations with Singaporean officials, who are aggressively courting semiconductor investments, according to multiple people familiar with the matter. These communications have not been previously reported.

Singapore already hosts several chipmaking factories and the Asia-Pacific hubs of major AI developers such as Meta Platforms. The city-state has watched AI stoke its growth and wants a larger role in the technology's value chain.

TSMC offered no confirmation. "We have no comment on market rumors," the company said in a text message. The Singapore Economic Development Board also declined to comment.

A Global Footprint, a Taiwanese Core

CEO CC Wei and other TSMC executives have consistently said international expansion serves customer demand and depends on cooperation and support from local governments. Beyond Arizona, the company is building plants in Kumamoto, Japan, in partnership with Sony Group, and a nascent project in Saxony, Germany.

For most of its history, TSMC concentrated production in Taiwan, reaping efficiency gains in management and labor. Growing US national security concerns, the Covid pandemic, and then the AI boom gradually drove the broader global push.

Any overseas expansion is unlikely to change one longstanding policy: TSMC develops its most advanced chipmaking technology at home. Taiwanese officials have repeatedly said the company will keep cutting-edge research and development in Taiwan, and TSMC executives have said that arrangement remains the most efficient way to advance the technology.

Whether the Texas campus materializes now rests largely on Washington: if Congress extends the 35 percent advanced-manufacturing credit before it lapses at year-end, TSMC could anchor its next wave of AI-driven capacity on US soil rather than in Singapore.