TSMC US chip production may soon only be three years behind Taiwan
TSMC is working to build two plants in Arizona faster, a move that could bring more Apple chip production to Arizona quicker -- but don't expect the newest chips.
A worker passing a TSMC sign
The TSMC facility in Phoenix, known as Fab 21, is the chip foundry's first factory in Arizona dedicated to chip production. However, while two others are under construction, TSMC plans to have them up and running sooner than first thought.
According to Nikkei, TSMC intends to speed up construction of the two sites considerably. The factories will be accelerated "by several quarters," TSMC claims, with the intention of bringing them online faster.
TSMC says it is to meet the demand from U.S.-based customers for smartphone and AI computing chips.
"After completion, around 30% of our 2-nanometer and more advanced [chip] capacity will be located in Arizona," said TSMC chairman and CEO CC Wei on Thursday. It will create "an independent, leading-edge semiconductor manufacturing cluster in the U.S."
Closer to Taiwan tech
The assertion by TSMC that it will be cutting "several quarters" off the construction time for its two factories is a big thing for U.S. chip production in general. Something that is severely lagging behind Taiwan.
In March, it was said that the second Arizona plant would be ready for 3-nanometer chip production by 2028, while the third plant would be used for 2-nanometer chips. That third plant, which broke ground in April 2025, was thought to be ready by 2030.
With 2-nanometer production already in progress in TSMC's Taiwan facilities, that effectively meant that TSMC's U.S. facilities were five years behind Taiwan.
By cutting down the construction schedule by a considerable amount, this could bring the overall lag for U.S. production down to as few as three years.
Faster by investment
The acceleration of construction follows months after TSMC pledged a $100 billion investment in the United States. The investment, intended to take place over four years, was to be used to increase TSMC's manufacturing footprint in the country.
TSMC had already made an initial investment in Arizona to the tune of $12 billion in 2020. It has also received a $6.6 billion package from the Biden administration as part of the CHIPS act.
The latest high-value pledge will almost certainly be used in part to speed up the building of the facilities. Processes which, due to the size and complexity, take a long time to complete.
The U.S. iPhone chip dream
The acceleration of construction at the facilities should be well received by the administration of President Donald Trump. He has repeatedly campaigned for more manufacturing to return to the United States, and has called out Apple to do the same.
There are roadblocks. Notably, a lack of U.S.-based resources and an educated local workforce needed for iPhone assembly to take place at all are the main hindrances.
It is highly plausible that the smartphone and AI chip demand could be from Apple, as the Cupertino company is one of TSMC's biggest chip clients. Such a move will make the construction of an iPhone entirely in the United States a little bit closer to reality.
Until that happens, Apple has no choice but to accept that its chips have to be built in TSMC's more up-to-date facilities in Taiwan. At least, for its more advanced chips.
The $100 billion won't necessarily allow the U.S. projects to catch up to Taiwan completely, but a few quarters closer is still a lot when it comes to manufacturing.
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Comments
unfortunately it also shows trump’s tariffs might be having some positive impact. Even a broken clock is right twice a day.
Once there is some level of vertical integration in place, TSMC may move even more of their production to North America, far far away from the range of CCP artillery which is pointed at their heads at the moment.
That said, I doubt TSMC wants to ever have US manufacturing exactly on par with Taiwan, considering they want to maintain their value in the eyes of powerful allies as a buffer against Chinese invasion/hostilities/takeover, etc. They'd be glad to take the money though.
Having TSMC in the USA is great. Would be even greater if the USA companies like Intel could figure out how to leap ahead and become something special again. But then again, they'd probably get full of themselves and start pricing fabs for companies like Apple into the stratosphere... But American companies like Intel were what was mainly on the minds of the creators of the Chips and Science act. What has Intel actually done with the money? Who knows. The expansions it provides for is supposed to create more jobs someday...
It IS possible for the USA to get competitive with other nation's manufacturing. But it takes the will to begin and see it through hard times. It's a tough ask, but like anything else, if there's a will, there's a way. I do believe cultural work ethic has a ways to go in America before we can catch up to other countries, let alone exceed them.
Right now TSMC has the edge. How long will that last? It seemed Intel had the edge forever and a day, with some heel biting and occasional leapfrogging from AMD. But then TSMC came along and changed the game. Would be great to see them keep it up, but this kind of tech is a breakneck speed kind of thing. Sooner or later, TSMC may have to forgo national ideals in order to stay ahead. Hopefully Taiwan allies have the integrity to stand up for the country if/when china decides to get (even more) uppity.