TSMC Doubles Down on Domestic Chip Manufacturing with Ambitious Expansion Plan

TSMC announces a massive expansion in Taiwan, focusing on advanced packaging and next-gen 2nm & 1.4nm chips to power the AI revolution and maintain its tech leadership.

As global conversations about supply chain diversification continue, Taiwan Semiconductor Manufacturing Company (TSMC) is taking decisive action on its home turf. The world's leading contract chipmaker has outlined plans to construct or break ground on as many as ten new fabrication plants in Taiwan by 2026. This aggressive infrastructure push is fueled by the insatiable demand from major technology firms for next-generation artificial intelligence (AI) semiconductors.

Addressing the Advanced Packaging Bottleneck

A significant focus of this expansion is on overcoming a critical bottleneck in the hardware sector: advanced packaging. This specialized process for assembling chips is essential for creating the high-performance computing systems required for AI applications. To meet soaring demand, TSMC is establishing dedicated facilities in Taichung and Chiayi. Reports indicate the AP5B plant in Taichung is scheduled for completion before the end of this year.

This move underscores a clear strategic message from TSMC. Despite its substantial investments in the United States, Japan, and Europe, the company's technological core and most advanced research and development operations remain firmly rooted in Taiwan.

Pursuing Cutting-Edge Process Leadership

The expansion is not merely about increasing capacity; it represents a technological leap forward. According to an analysis by TrendForce, TSMC's strategy centers on deploying its most advanced manufacturing nodes, including 2nm, A16, and A14 processes. Key sites in this endeavor are the Fab 20 complex in Hsinchu and the Fab 22 facility in Kaohsiung.

Volume production of 2nm chips has already commenced in Hsinchu, with a target monthly capacity of 20,000 to 25,000 wafers. Concurrently, the company is preparing its site in the Central Taiwan Science Park (Fab 25) to become a hub for the even more sophisticated 1.4nm technology. The timeline for this next phase is firmly established, with risk production for the 1.4nm node set for 2027, followed by planned volume production in the second half of 2028.

Market Confidence and Structural Shift

Investors have responded positively to TSMC's demonstrated technological leadership and ambitious roadmap. Since the start of the year, the company's shares have appreciated by nearly 14%, even after a slight daily pullback to 311.00 euros.

The sheer scale of TSMC's plan—managing up to ten major construction projects simultaneously—highlights a fundamental structural shift within the semiconductor industry. The drive is unequivocally toward building the powerful, advanced infrastructure required to support the ongoing global AI revolution.