TSMC said its overseas capacity buildout is pushing up production costs and will continue to weigh on profitability over the next several years, according to CNBC in a report cited by BlockBeats on July 22, as the Trump administration presses to bring advanced chip manufacturing back to the United States.
Since Trump returned to the White House in 2025, TSMC has announced a cumulative $200 billion in US investment. That total includes a newly announced $100 billion project for advanced semiconductor manufacturing and advanced packaging. The White House said those investments were the result of Trump’s trade and industrial policy push.
Record quarterly profit did not remove margin concerns
TSMC reported second-quarter net profit growth of 77.4% from a year earlier, setting another record high. Its gross margin came in at 67.7%, above the 66.2% reported in the first quarter.
Still, Chief Financial Officer Wendell Huang said the ramp-up of overseas wafer fabs will keep diluting gross margin. He said the pressure is expected to be about 2% to 3% in the early stage over the coming years, and could widen to 3% to 4% at a later stage.
US chip production remains more expensive
Morningstar analysts estimate that manufacturing chips in the United States costs 20% to 50% more than in Taiwan, depending on subsidies, tax credits and other cost factors.
The market widely expects TSMC to pass some of that added cost on to customers through price increases. Earlier media reports said the company plans to raise foundry prices for both advanced and mature process nodes by as much as 10% in 2027.
Analysts said that despite the higher cost of building and operating plants in the United States, TSMC is still likely to keep expanding its US manufacturing footprint, supported by growing AI demand, supply-chain diversification and US industrial policy. They added that the company’s lead in advanced process technology gives it relatively strong ability to pass costs through.