Taiwan Semiconductor Manufacturing Co. is exploring potential investments in Texas to expand its chip production in the United States, the advanced chipmaker said after posting another record profit on strong artificial intelligence demand.
TSMC said during an earnings conference Thursday that it is open to collaborating with Elon Musk’s planned “Terafab” chip manufacturing complex in Texas.
TSMC, which produces over 90% of the world’s most cutting-edge chips, supplies to U.S. technology giants include Nvidia and Apple and has pledged $265 billion of investments in building plants in Arizona, including $100 billion the company committed in July.
The company’s earnings results are seen as a barometer for the world’s AI development during a global scale-up in AI computing power. For the July-September quarter, the chipmaker reported a record 763.1 billion new Taiwan dollars (nearly $24 billion) in net profit, which was better than expected and up 69% from the year before. Revenue for the quarter was at 1.49 trillion new Taiwan dollars ($46 billion), up 51% year-on-year.
“The AI market continues to be very strong,” C.C. Wei, chairman and CEO of TSMC, said during Thursday’s conference. “The demand, actually, is still far above our capability today to supply, and we’re working very hard to narrow the gap.”
TSMC is working hard to expand in response to requests from most of its large U.S. customers to increase capacity, Wei said.
The chipmaker based in Hsinchu, Taiwan, recently has explored expanding its capacity outside of Arizona and Texas is among the options under consideration, he said, confirming earlier media reports.
“We sent the teams to Texas to do all the evaluation,” Wei said, adding that the plan is still under deliberation.
TSMC is in discussions to be part of the “Terafab” project in Texas, Wei added, stressing that a plant in Texas must be run by TSMC.
Musk confirmed on X earlier this month that there have been discussions with TSMC over its potential role in Terafab, but he also said “we will build and run the fab,” referring to chip fabrication facilities, and TSMC at most would be subleasing part of the Terafab.
TSMC has said it has an annual capital expenditure budget of $60 billion to $64 billion for this year, up from its previous estimate earlier this year of $52 billion to $56 billion.
Spending between 2026 and 2028 will be significantly higher than the past three years, TSMC Chief Financial Officer Wendell Huang said during the earnings call.
But TSMC, one of the world’s most valuable public companies, also cautioned there will be macroeconomic challenges.
“Looking ahead, we continue to observe consumer and price-sensitive end market segments are being challenged due to the impact of rising component prices and macroeconomic uncertainties,” Wei said. “As such, we have been prudent in our business planning going into 2027.”