Taiwanese companies explore possibilities in Texas as the island eyes $4 billion industrial park in the state

Taiwan is planning a multibillion-dollar network of industrial parks in the United States, beginning in Texas, as the island seeks to strengthen its semiconductor and artificial intelligence (AI) supply chains while helping smaller manufacturers establish an American foothold.

A new model for overseas expansion

Minister of Economic Affairs Kung Ming-hsin (龔明鑫) announced in October that Taiwan intends to develop multiple industrial parks across the United States, with each complex requiring an estimated investment of US$2 billion to US$4 billion.

Speaking to Bloomberg, Kung identified Texas as the initial destination for the initiative, which aims to help smaller Taiwanese suppliers establish operations in the United States.

According to Bloomberg, the proposed industrial parks would strengthen supply chains supporting major technology companies, including Nvidia, Taiwan Semiconductor Manufacturing Company (TSMC), and Foxconn.

Unlike conventional government-funded infrastructure projects, the initiative will rely primarily on private capital raised through the Taiwan Electrical and Electronic Manufacturers' Association (TEEMA), with government assistance facilitating implementation.

Kung said the government would support Taiwanese suppliers seeking to establish operations in the proposed industrial parks by offering loan guarantees and helping coordinate with US federal and local authorities on matters including visa applications and land acquisition.

The initiative could prove particularly valuable to smaller Taiwanese suppliers producing critical components, including chip packaging substrates and cooling modules.

While industry giants such as TSMC and Foxconn possess the financial resources to establish manufacturing operations overseas, smaller companies often struggle with the substantial costs of international expansion.

Bloomberg, citing a person familiar with the matter, reported that Taiwan had already secured a plot of land in Texas for the proposed industrial park.

The Ministry of Economic Affairs (MOEA), however, has neither confirmed the land acquisition nor disclosed the site's location, saying only that further details would be announced at an appropriate time.

Texas emerges as a strategic manufacturing hub

The initiative coincides with growing interest in Texas among Taiwan's leading technology manufacturers.

During TSMC's Oct. 15 earnings conference, Chairman and CEO C.C. Wei (魏哲家) confirmed that the semiconductor giant had dispatched a team to evaluate potential expansion opportunities in Texas, beyond its existing Arizona operations.

The company is also exploring possible cooperation with the proposed Terafab semiconductor manufacturing venture associated with Tesla and SpaceX.

However, TSMC has not announced a definitive investment decision concerning Texas.

Meanwhile, Taiwanese electromechanical manufacturer TECO is exploring new projects at its existing TECO-Westinghouse Motor Company facilities in Texas.

TECO president Kao Fei-yuan (高飛鳶) said at an Oct. 20 exhibition that the company's extensive land holdings and available manufacturing capacity could support the production of modular AI data centers without requiring substantial additional investment.

He added that several projects were already underway, with further initiatives expected in the coming years.

Opportunities and economic considerations

Industry analysts see the emerging Texas cluster as an opportunity to deepen Taiwan's integration with American technology markets.

Asked about the possibilities and calculations of TSMC expanding its operations in Texsa, Liu Pei-chen (劉佩真), the research director of the Taiwan Industry Economics Database at the Taiwan Institute of Economic Research (TIER), stated that expanding American production could help TSMC strengthen relationships with major US AI customers, which constitute nearly 75% of its customer base, while diversifying geopolitical exposure.

Liu added that if TSMC proceeds with the Texas expansion, the new facilities could complement its existing operations in Arizona, creating a formidable dual-hub semiconductor manufacturing corridor in the United States.

Such a development, Liu argued, would further consolidate the company's dominant position in the North American market.

Tiff Wang (王瑀玟), an Arizona-based business strategy consultant specializing in cross-border investment, wrote in an Oct. 22 analysis that Texas offers an established semiconductor manufacturing base, a diverse engineering workforce, and extensive networks of technology companies.

However, Wang cautioned that electricity supply, infrastructure constraints, rising operating costs in rapidly developing areas, and differences in local taxation could complicate investment decisions.

Wang also stated that Texas and Arizona could develop complementary roles within the US semiconductor industry rather than compete directly for investment.

For Taiwan's smaller manufacturers, Wang said the proposed industrial parks could reduce barriers to entering the American market through shared infrastructure and coordinated services.

Yet their eventual success will depend on financing, implementation, and whether participating companies can establish commercially sustainable operations.

As Taiwan's technology industry extends its international footprint, the proposed parks could mark a transition from individual overseas investments toward a more coordinated, cross-border manufacturing network.