TSMC Expands Global Footprint as AI Chip Race Strains Resources

The semiconductor supply chain is shifting from concentrated production toward a “multi-country localization” model, with manufacturers building capacity closer to major markets while retaining cross-border specialization. Chen Shin-horng, vice president of the Chung-Hua Institution for Economic Research, likened the approach to a McDonald’s-style network. TSMC’s U.S. expansion is aimed at advanced AI chips and packaging demand while addressing government and customer concerns over supply-chain resilience.

Chen said the global AI arms race is accelerating demand for leading-edge manufacturing and advanced packaging, but overseas fabs, equipment purchases and inventory preparation require substantial capital. Companies are also competing across regions for skilled workers, production capacity and critical materials. TSMC can use its U.S. presence to move closer to customers and capture AI-related growth, though the broader supply chain must balance expansion, funding needs and operating efficiency.