TSMC to Build Third Arizona Plant at 'Taiwan Speed' [Report]

TSMC, the world's leading chipmaker and a key supplier for Apple, is accelerating its U.S. expansion with plans to begin construction on a third Arizona factory this year, according to Nikkei Asia. The announcement comes as part of a broader $165 billion investment push which includes five additional advanced chip plants and an R&D center on American soil. This marks a significant step in diversifying production beyond Taiwan, where TSMC has long been headquartered and dominant in the global semiconductor industry.

The company's first Arizona facility, its initial cutting-edge plant outside Taiwan, began production late last year after nearly five years of construction hampered by labor shortages, rising material costs, and cultural adjustments. A second, more advanced plant is now underway, with clean room installations in progress and pilot production slated for next year. The third factory, set to break ground in 2025, reflects TSMC's growing confidence in streamlining its U.S. operations. Sources told Nikkei Asia that after a steep learning curve, TSMC expects these new facilities to be built closer to its standard "Taiwan speed" of about two years, a sharp improvement over the first plant's timeline.

"After a painful learning curve, we have finally connected most of the dots and know which local construction contractors we can work with in building new plants," said a chip executive.


TSMC has outlined clear targets for its Arizona expansion. The second plant will focus on 3-nanometer chips, with operations starting by 2028, while the third will produce 2-nanometer and more advanced chips before the decade ends. This accelerated pace aligns with the company's $100 billion commitment announced earlier this month alongside U.S. President Donald Trump, building on prior investments that grew from $12 billion in 2020 to $65 billion by 2022 under the CHIPS Act. The latest pledge brings the total U.S. investment to $165 billion, dwarfing TSMC's earlier overseas efforts.

Back in Taiwan, TSMC remains heavily active, expanding its own cutting-edge facilities. Production of 2-nanometer chips is set to begin this year at plants in Hsinchu and Kaohsiung, while a 3-nanometer plant in Tainan continues to grow. The company is also developing next-generation A14 and A10 chips at its Hsinchu headquarters and building advanced packaging facilities in Tainan, Chiayi, and Miaoli to meet demand from clients like Apple, Nvidia, and others driving the AI boom. Seventy percent of TSMC's 2024 revenue came from U.S. chip developers, underscoring its deep ties to American tech giants.

The U.S. push stems from mounting pressure to onshore critical chip production, driven by Washington's concerns over China's aggression toward Taiwan. TSMC's Arizona plants are already serving clients like Nvidia, with Apple likely to benefit as well given its reliance on TSMC for iPhone, iPad, and Mac processors. The company's ability to adapt its rapid Taiwan construction model to the U.S. could reshape supply chains for Apple and other tech leaders in the years ahead.

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