--- title: "Texas names Sherman ideal for a two-plant, $45 billion chip project, and TSMC is the presumed buyer" description: "State site-screening documents name Sherman, Texas as ideal for a two-plant, $45 billion project with no buyer attached, and TSMC is the presumptive one. The capex bill arrives years before the revenue, in a city where Texas Instruments is already spending $46 billion." publisher: "The Inference" section: "Chips" published: 2026-10-31T21:00:46.615Z modified: 2026-10-31T21:00:46.615Z canonical: https://theinference.org/article/texas-names-sherman-ideal-for-a-two-plant-45-billion-chip-project-and-tsmc-is-the-presumed-buyer language: en keywords: "TSMC, Semiconductors, Texas, Capex, Fab Construction" --- # Texas names Sherman ideal for a two-plant, $45 billion chip project, and TSMC is the presumed buyer > State site-screening documents name Sherman, Texas as ideal for a two-plant, $45 billion project with no buyer attached, and TSMC is the presumptive one. The capex bill arrives years before the revenue, in a city where Texas Instruments is already spending $46 billion. Sherman, Texas, sits 15 miles south of the Red River, and state paperwork now puts it first in line for a two-plant, $45 billion chip complex [1]. [Site-screening documents obtained by The Real Deal](https://therealdeal.com/texas/2026/10/30/tsmcs-45b-texas-expansion-puts-sherman-in-spotlight/), reported on October 30, 2026, describe a search for two fabrication plants and the $45 billion to build them, with a state note calling Sherman an ideal candidate [1]. The documents do not name the company [1]. The same day, [TSMC](https://theinference.org/markets/companies/tsmc)'s New York-listed shares fell 5.95 percent in a selloff that stripped 7.2 percent from the Philadelphia Semiconductor Index [2]. ## The buyer is unnamed; the schedule is not The presumptive buyer is Taiwan Semiconductor Manufacturing, producer of more than 90 percent of the world's most cutting-edge chips, already pledged to $265 billion in Arizona [3]. Bloomberg has reported the company sizing space in the Dallas-Fort Worth metroplex [1], and chief executive C.C. Wei said on October 15: "[We sent the teams to Texas to do all the evaluation](https://www.bostonherald.com/2026/10/15/taiwan-chipmaker-tsmc-texas/)" [3]. The September quarter was the best in the company's history: revenue of $46.72 billion, up 41.2 percent, at a 66.4 percent gross margin, with fourth-quarter guidance of $52.3 billion to $54.3 billion [4][5]. ## The bill lands years before the revenue This year's capital budget runs $60 billion to $64 billion, up from $52 billion to $56 billion, and the company says investment from 2026 through 2028 will be "substantially higher" than the prior three years [3][4]. Wei said in January that this spending adds little output before 2028 [5]. The last capex peak, in 2022, was followed by a 9 percent revenue decline in 2023 [5]. The stock has voted with the calendar: down 11 percent in October, about 16 times forward earnings [5]. The scarcity case cuts the other way. [Anthropic's October 26 IPO filing](https://www.firstpost.com/business/anthropic-tsmc-taiwan-ai-chip-supply-risk-14055710.html) says most advanced chip capacity sits at TSMC in Taiwan, that TSMC has at times been unable to meet demand, and that capacity outside Taiwan remains in early stages [6]. Taiwan's Commercial Times reports a CoWoS price increase of up to 20 percent being prepared for the packaging step that joins an AI processor to its memory, which TSMC has not confirmed [7][8]. *Chart: **TSMC's capex is now climbing more than twice as fast as its revenue** Line chart of TSMC quarterly revenue and capital spending from Q3 2023 through Q2 2026, capex climbing to $15.6B against revenue of $39.8B* *Quarterly revenue and capital spending in US$ billions, from TSMC's SEC filings; the June 2026 quarter is the latest in the series. [9]* ## Sherman already has an incumbent [Texas Instruments](https://theinference.org/markets/companies/texas-instruments) committed $46 billion last year to a 1,200-acre complex in Sherman, planned at four plants, one of them complete; GlobalWafers makes wafers across town [1]. The city draws water from Lake Texoma, has bought water rights, and is planning an 84-inch pipeline running 27 miles to a second reservoir [1]. If the state now pays for two more plants, the money lands beside the incumbent rather than with it. Texas has paid at this scale once already, [Samsung's $44 billion Taylor complex](https://theinference.org/article/samsung-builds-a-second-texas-fab-on-a-44-billion-site-while-tsmc-only-sends-scouts), as we reported on October 17 [1]. ## What settles it Three readings matter: October revenue, due around November 10; any Texas incentive package for the two plants; and the 2027 guidance in mid-January [5]. [Anthropic](https://theinference.org/markets/companies/anthropic) prices its IPO in mid-November, a vote on the demand side of this ledger [2]. Foreign funds have already moved, selling a net NT$994.3 billion of Taiwanese shares in October, and the Taiex, where TSMC is more than 40 percent of the index, broke its 120-day moving average on Friday [2]. Sherman has the water for two chipmakers. Texas has not said which one it pays. ## Takeaway Texas site-screening documents name Sherman ideal for a two-plant, $45 billion fab complex with no buyer named, and TSMC is the presumptive one; the timing collides with the company's heaviest-ever capex and a month in which its stock fell 11 percent. ## Sources 1. [The Real Deal, "TSMC's eyes Sherman for $45B Texas expansion, potentially adding to North Texas semiconductor hub," 30 October 2026](https://therealdeal.com/texas/2026/10/30/tsmcs-45b-texas-expansion-puts-sherman-in-spotlight/) 2. [Focus Taiwan (CNA), "Taiex to face heavy pressure after TSMC's ADRs plunge nearly 6%: Analyst," 31 October 2026](https://focustaiwan.tw/business/202610310008) 3. [Associated Press via Boston Herald, "Taiwan chipmaker TSMC explores Texas investment to expand production in the US," 15 October 2026](https://www.bostonherald.com/2026/10/15/taiwan-chipmaker-tsmc-texas/) 4. [Observer, "Chipmaking Titan C.C. Wei Eyes Texas as TSMC's A.I. Demand Surges," 22 October 2026](https://observer.com/2026/10/cc-wei-tsmc-texas-terafab-chip-expansion/) 5. [Yahoo Finance, "TSMC Just Dropped 11% in a Month. Is It Time to Sell, or Load Up?," 31 October 2026](https://finance.yahoo.com/markets/stocks/articles/tsmc-just-dropped-11-month-074208718.html) 6. [Firstpost, "AI's Taiwan problem: Why Anthropic is worried about its chip supply," 27 October 2026](https://www.firstpost.com/business/anthropic-tsmc-taiwan-ai-chip-supply-risk-14055710.html) 7. [TweakTown, "TSMC reportedly weighs another CoWoS price hike of up to 20% as AI chip demand keeps growing," 27 October 2026](https://www.tweaktown.com/news/114323/tsmc-reportedly-weighs-another-cowos-price-hike-of-up-to-20-percent-as-ai-chip-demand-keeps-growing/index.html) 8. [Semiconductor Engineering, "Chip Industry Week In Review," 30 October 2026](https://semiengineering.com/chip-industry-week-in-review-162/) 9. [TSMC quarterly figures from its SEC filings, retrieved 31 October 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001046179) --- Texas names Sherman ideal for a two-plant, $45 billion chip project, and TSMC is the presumed buyer — The Inference. Canonical: https://theinference.org/article/texas-names-sherman-ideal-for-a-two-plant-45-billion-chip-project-and-tsmc-is-the-presumed-buyer