Chipmaker TSMC Projects 2026 Capex will Reach $52 Billion-$56 Billion

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Written by Danny Levin, Deputy Editor for IIR News Intelligence (Sugar Land, Texas)

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Summary

TSMC plans for between $52 billion and $56 billion in capital spending for 2026, an increase of as much as 40% from 2025's figure. Industrial Info is tracking more than $150 billion worth of active and planned U.S. projects from the company, all of which is attributed to its Fab 21 campus expansion in Phoenix, Arizona.

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TSMC's 2026 Capex Plan

Taiwan Semiconductor Manufacturing Company Limited's (TSMC) (Hsinchu, Taiwan) 2026 capital budget of between $52 billion and $56 billion is up from $40.9 billion spent in 2025 and $28.9 billion in 2024.

"A higher level of capital expenditures is always correlated to the high growth opportunities in the following years," TSMC Chief Financial Officer Wendell Huang said in the company's fourth-quarter earnings call last week.

"We are well positioned to capture the multi-year structure demand from the industry megatrends of 5G, AI [artificial intelligence] and HPC [high-performance computing]."

He said about 70% to 80% of the 2026 capital budget will be allocated to advanced process technologies, about 10% will be spent on specialty technologies and about 10%-20% will be spent on advanced packaging, testing, mask making and others.

TSMC's advanced technologies focus on the company's core foundry segment, producing high-end chips used in AI, HPC and smartphones; they are specialized for computing speed and energy efficiency. Specialty technologies, on the other hand, cover a broad range of physical applications such as electronic systems, medical devices and wearables. Advanced packaging combines advanced and specialty chips into a single package.

The company reported a 35% increase in fourth-quarter profit year-over-year (to a record US$16 billion), driven by high demand for its advanced AI chips. Revenue jumped by 25% year-over-year, and TSMC Chief Executive Officer C.C. Wei said in the call he expects full-year 2026 revenue to increase by nearly 30%.

"Our conviction in the multi-year AI megatrend remains strong, and we believe the demand for semiconductors will continue to be very fundamental."

TSMC's Arizona Fab Buildout

Industrial Info is tracking more than $150 billion worth of capital U.S. projects from the company, with the full amount attributed to its Fab 21 campus expansion in Phoenix, Arizona.

According to Industrial Info's Global Market Intelligence (GMI), the first phase is already operational, producing 10,000 to 30,000 4nm (N4) wafers per month. Following the success of Phase 1, TSMC scaled up the project significantly, with overall investment rising from US$12 billion to US$165 billion to support phased expansion beyond the initial phase.

Also in the call, Wei provided updates on the project timeline. "Construction of our second fab is already complete and tool moving and installation is planned in 2026. Due to the strong demand from our customers, we are also pulling forward the production schedule and now expect to enter high volume manufacturing in the second half of 2027. Construction of our third fab has already started and we are in the process of applying for permits to begin the construction of our fourth fab and fourth advanced packaging fab."

Phase 2 targets volume production of 3-Nanometer (N3) chips, while Phase 3 is aimed at producing 2-Nanometer (N2) chips and A16 process technologies.

Phases 4, 5, and 6 each hold a spend of more than US$9 billion.

A significant portion of the overall investment is going toward the packaging facility.

Subscribers to the Global Manufacturing Intelligence (GMI) Industrial Manufacturing Project Database can see a full list of related project reports.

New Taiwan-U.S. Chip Deal Includes Semiconductor Investment, Lower Tariffs

In exchange for lower tariffs (15% from 20%), Taiwan pledged to invest $500 billion in the U.S.: chip and technology companies will invest at least $250 billion "to build and expand advanced semiconductor, energy, and artificial intelligence production and innovation capacity in the United States," according to a U.S. Department of Commerce fact sheet. The other $250 billion will go toward credit guarantees for the companies.

U.S. Commerce Secretary Howard Lutnick hinted last week that some of the investment could go toward further expanding TSMC's Arizona site, telling CNBC that the company "bought hundreds of acres adjacent to their property ... I'll let them go through with their board and give them time."

Also under the agreement, future U.S. semiconductor tariffs under Section 232 will reward Taiwanese companies that build new domestic semiconductor production capacity such as TSMC: they are permitted to import up to 2.5 times the planned capacity without paying duties during the approved construction period, while shipments exceeding that limit will be subject to a "lower preferential" Section 232 rate.

Key Takeaways

• TSMC's 2026 capital spending could jump 40% compared with 2025, to $52 billion-$56 billion.
• Most of the projected spend is attributed to production of the company's high-end logic chips, such as those for AI and HPC.
• TSMC is ramping up the expansion of its Arizona fab, which could see additional investment spurred by the recent U.S.-Taiwan trade deal.
• Most of the overall Arizona investment is attributed to the packaging facility.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resource's Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).