When you're the world's most important chipmaker, governments line up to help you build factories. Taiwan Semiconductor Manufacturing Co. (TSM) has collected close to 147 billion New Taiwanese dollars—that's $4.71 billion—in government subsidies over the past two years, and the money is flowing from every direction.
The U.S., Japan, Germany, and China are all competing to host the contract chipmaker's operations, supporting what amounts to an aggressive global diversification strategy. In the third quarter of 2025 alone, Taiwan Semiconductor pocketed 4.77 billion New Taiwanese dollars in subsidies, bringing the nine-month total for 2025 to 71.9 billion. Add that to the 75.16 billion received in 2024, and you've got a serious pile of government support.
So where's all this money going? Taiwan Semiconductor says its overseas subsidiaries are using the funds primarily to purchase property, equipment, and facilities, while also covering operating expenses for newly built fabs. We're talking about Taiwan Semiconductor Arizona in the U.S., European Semiconductor Manufacturing Co. (ESMC) in Dresden, Japan Advanced Semiconductor Manufacturing (JASM) in Kumamoto, and Taiwan Semiconductor Nanjing in China. Each subsidiary has signed agreements with local governments spelling out construction schedules and investment terms.
The Arizona operation is particularly lucrative. Taiwan Semiconductor qualifies for additional support covering 25% of specific investments there. The company is investing $65 billion to build three advanced fabs in the state, with mass production at the first fab starting in late 2024. But that's not all—Taiwan Semiconductor has committed another $100 billion to build three more fabs, two IC packaging plants, and a research center in Arizona.
Meanwhile, the Kumamoto fab began commercial production at the end of 2024, and construction continues on a second facility. In Dresden, mass production plans depend on customer demand and market conditions. The Nanjing operation, which began producing 28nm chips in 2022, continues running its 12-inch wafer fab.
All this expansion is happening while Taiwan Semiconductor, now a $1.5 trillion market cap company, has gained 43% year-to-date. The surge makes sense when you consider that U.S. Big Tech giants continue aggressively investing in AI, fueling demand for the chipmaker's advanced chips.
Taiwan Semiconductor is also rewarding shareholders along the way. The company raised its third-quarter cash dividend 20% to 6 New Taiwanese dollars per share and approved a $14.98 billion capital expansion plan. The higher payout follows record quarterly profit and signals confidence in the company's financial strength as it scales advanced manufacturing capacity for major customers like Nvidia Corp. (NVDA) and Apple Inc. (AAPL).
TSM Price Action: Taiwan Semiconductor shares closed lower by 0.99% at $282.01 on Monday.
