Taipei: Taiwan Semiconductor Manufacturing Co. (TSMC) Chairman C.C. Wei dismissed market speculation on Thursday regarding a potential joint venture with U.S.-based Intel Corp. Speaking at an investor conference, Wei clarified that TSMC is not in discussions about any joint venture deal, specifically with Intel, and emphasized that the company will not participate in a joint venture concerning Intel’s pure play wafer foundry business.
According to Focus Taiwan, international media outlets have suggested that TSMC might take a stake in a new company to support Intel’s wafer foundry operations, allegedly under pressure from the Trump administration due to tariffs. Such reports have sparked concerns about possible leaks of business secrets from TSMC. Wei, however, reaffirmed that there have been no talks with Intel regarding joint ventures, technology transfers, or technology licensing.
In March, U.S. President Donald Trump, alongside Wei at the White House, announced TSMC’s plan to invest an additional US$100 billion in Arizona, building three advanced wafer fabs, two IC assembly plants, and a research and development center, elevating TSMC’s total investment in the state to US$165 billion. Market observers attribute these investments to Trump’s tariff strategies aimed at encouraging foreign manufacturers to invest in the U.S. market. Wei noted the additional investments are intended to meet demand from American clients such as Apple, Nvidia, Qualcomm, and Broadcom.
Wei mentioned that TSMC’s U.S. facilities are expected to account for about 30 percent of the total production of the 2 nanometer process, forming an independent semiconductor cluster. The process is under development and is set to begin mass production in Taiwan later this year. In response to U.S. tariff policies, Wei expressed TSMC’s commitment to maintaining its market leadership, advancing technologies, and boosting client trust to enhance its competitive edge.
Wei also highlighted that TSMC’s sales are projected to grow 24-26 percent in 2025 in U.S. dollar terms, surpassing the 10 percent increase forecasted for the entire pure play wafer foundry business. TSMC plans to maintain its capital expenditure for 2025 between US$38 billion and US$42 billion, allocating 70 percent to advanced process development, 10-20 percent to specialty technology, and another 10-20 percent to advanced IC assembly and testing.
For the second quarter, TSMC Chief Financial Officer Wendell Huang projected consolidated sales between US$28.4 billion and US$29.2 billion, with a 13 percent growth from the first quarter due to strong demand for TSMC’s advanced 3nm and 5nm processes. Nonetheless, higher production costs at overseas facilities could impact TSMC’s gross margin, which is expected to range from 57 percent to 59 percent, slightly lower than the first quarter.
TSMC’s initial wafer fabs in Arizona and Kumamoto, Japan began commercial production in 2024. The company is constructing a second fab in Arizona and plans to start building a second fab in Kumamoto later this year. With these expansions, TSMC’s gross margin may decline by 2-3 percentage points initially and 3-4 percentage points later over the next five years. However, Huang assured that through cost control and collaboration with suppliers and clients, the gross margin will remain above 53 percent in the long term. Additionally, TSMC is planning to establish a fab in Germany and build 11 fabs and four IC packaging plants in Taiwan in the coming years.