TSMC accelerates US expansion, eyes Arizona as global semiconductor hub

Taipei [Taiwan], July 18 (ANI): Taiwan Semiconductor Manufacturing Co. (TSMC) is fast-tracking the construction of its second and third semiconductor fabrication plants in Arizona, with plans to establish a large-scale gigafab cluster in the state, Focus Taiwan reported.

The semiconductor giant is planning to establish a global gigafab cluster in the state, the report added.

The move is part of the company broader strategy to meet growing global demand for advanced chips used in smartphones, artificial intelligence (AI), and high-performance computing (HPC).

Speaking at an investor conference on Thursday, TSMC Chairman CC Wei highlighted the strategic importance of Arizona in the company global footprint.

He said the state is poised to become a key centre for TSMC most advanced production technologies.

The first fab in Arizona began mass production in the fourth quarter of last year, utilising 4-nanometer process technology. Wei noted that its yield rate matches that of similar facilities in Taiwan.

TSMC has completed construction of its second fab in Arizona, which will produce chips using the more advanced 3nm process, the latest node the company has deployed in Taiwan.

Wei said that production is now scheduled to begin several quarters earlier than planned to accommodate strong customer demand.

The third fab, where groundwork has already begun, will adopt 2nm and A16 process technologies.

Wei stated that demand for chips in AI-related applications continues to be strong.

The total investment for the three Arizona fabs stands at USD 65 billion. TSMC has committed an additional US$100 billion over the coming years to expand its US presence with three more fabs, two integrated circuit (IC) assembly plants, and a research and development centre.

These investments are expected to turn Arizona into a self-sustaining semiconductor manufacturing hub within the United States.

According to Wei, the Arizona facilities will eventually account for around 30 per cent of TSMC most advanced chip production--those using 2nm and more cutting-edge technologies.

TSMC global expansion also includes projects in Japan and Germany. In Kumamoto, Japan, its first fab began mass production at the end of 2024, making chips using mature 12nm, 16nm, and 28nm processes.

A second fab, originally slated to start construction in early 2025 and begin operations in late 2027, will manufacture 6nm, 7nm, and 40nm chips.

Wei noted a slight delay in the second Kumamoto project due to traffic infrastructure issues.

Construction is now expected to begin later this year, contingent on local progress, as per Wei, quoted by the news platform.

In Germany, TSMC is advancing with the construction of a fab in Dresden, which will focus on specialty technologies. Wei said the project is progressing smoothly.

Meanwhile, in Taiwan, TSMC continues its major domestic buildout. The company plans to construct 11 new wafer fabs and four advanced IC assembly facilities in the coming years.

Current projects in Hsinchu and Kaohsiung are scheduled to begin mass production using 2nm process technology later this year.

TSMC Chief Financial Officer Wendell Huang noted that while overseas expansion is critical to the company future, it will have short-term financial impacts. He projected that gross margins will initially decline by 2-3 percentage points, with a 3-4 percentage point dip expected over the next five years due to higher overseas operating costs. (ANI)

Disclaimer: This news article is a direct feed from ANI and has not been edited by the News Nation team. The news agency is solely responsible for its content.