Taiwan Semiconductor Manufacturing Co. is preparing to expand output at its Arizona site, according to people familiar with the matter, as Washington considers stricter limits on advanced chip exports to China. The move would add more capacity at one of the most closely watched semiconductor projects in the United States.

The expansion comes as U.S. officials weigh additional controls aimed at slowing China’s access to high-end chips and the tools needed to produce them. Those restrictions have become a central part of the broader technology contest between the world’s two largest economies.

TSMC has been under pressure from major U.S. customers and policymakers to increase domestic chip production, reducing reliance on overseas manufacturing. The Arizona facility is a key part of that push, especially for advanced chips used in artificial intelligence, data centers, and other high-performance applications.

The planned capacity increase underscores how export policy and industrial strategy are increasingly linked. For Taiwan’s chipmaker, the expansion could strengthen its U.S. footprint while helping Washington pursue a more resilient semiconductor supply chain.