Taiwan Semiconductor Manufacturing Co. (TSMC) expands internationally due to significant land constraints in Taiwan. These constraints hinder domestic growth for large-scale industrial projects.
The Taiwan Institute of Economic Research (TIER) identifies land scarcity as the main impetus for increasing foreign direct investment. TIER notes this factor outweighs tariff considerations or government pressure.
The expansion follows a tentative U.S.-Taiwan trade agreement. This agreement involves at least $250 billion in investments from Taiwanese tech firms, including TSMC, in the United States.
TSMC ramps up expansion in Arizona. The company emphasizes that overseas investments largely respond to customer demand.
Despite significant U.S. investments, 75% to 80% of Taiwan's semiconductor supply chain will remain on the island by 2030.