TSMC eyes a multibillion-dollar Texas campus for more AI chips

TSMC is weighing a new Texas campus of multiple fabs, each costing at least $20B, contingent on Congress extending a 35% manufacturing tax credit. Its only European plant, the Dresden joint venture, totals above EUR 10B and will run 28nm to 12nm nodes rather than anything used for AI.

TSMC is eyeing a Texas campus worth tens of billions, to build more AI chips. Each fab on it would cost at least $20B. Its entire European project is budgeted above EUR 10B.

The company is looking at more overseas capacity, according to people familiar with its plans, as Bloomberg reported. Plans are early, and TSMC said it has no comment on market rumours.

It has committed $265B in Arizona, building ten fabs, two packaging plants and a research centre. North America brought in more than 75% of its wafer revenue this year.

The decision depends on Congress. A 35% manufacturing tax credit requires construction to start by the end of December, and no extension has a path this year. Senators Mike Crapo and Ron Wyden say they are committed to one.

Europe has one TSMC plant and needed a subsidy for it. Brussels approved EUR 5B in state aid for the Dresden joint venture in August 2024, against a total above EUR 10B.

That plant will make 40,000 wafers a month. Equipment moves in this half, production starts in 2027 and full capacity arrives in 2029.

It will not make AI chips. Dresden runs 28 and 22nm CMOS alongside 16 and 12nm FinFET, several generations behind the nodes Nvidia and Apple buy.

A single Texas fab would cost about twice the whole Dresden project. Texas already holds Samsung’s chip complex, Musk’s Terafab and a Texas Instruments expansion. The other site TSMC weighed is Singapore, not anywhere in Europe.

Europe’s record is not empty. Infineon opened a EUR 5B power chip fab in Dresden in July on EUR 1B of EU support, the act’s first win.

The target behind it will be missed. The EU wants 20% of the global market by 2030, held 9.8% in 2022, and its own forecast puts it at 11.7%.

The European Court of Auditors called the goal very unlikely in April last year. Industry has asked for a Chips Act 2.0, and the Commission is drafting one.

The EUR 86B the first act was meant to mobilise is mostly not EU money. The Commission funds 5%, with member states and private investors covering the rest.

TSMC keeps its most advanced research in Taiwan whatever it builds abroad. The question for Europe is not the leading edge. It is whether it is in the room when the next campus is picked.