Expanding U.S. production for top-tier semiconductors: TSMC plans to construct a new fabrication facility in Arizona, targeting a 30% manufacture share.
In a move to bolster domestic chip production in the United States, Taiwan Semiconductor Manufacturing Company (TSMC) is speeding up the production ramp-up at its second fab site in Arizona. This facility, designed to manufacture 3-nanometer chips, is pivotal for meeting the demand from leading U.S. customers, particularly for AI and high-performance computing applications.
Once all six planned fabs in Arizona are operational, TSMC aims to produce 30% of its most advanced chips in the state. By accelerating production at the second fab, TSMC is likely to increase its total percentage of leading-edge wafer output produced in the U.S. more quickly than originally planned. This rapid expansion supports TSMC's goal of establishing Arizona as a global semiconductor hub, significantly enhancing the state's role in the production of cutting-edge chips.
The second fab, which has already been completed, utilises TSMC's 3nm process node. The construction and ramp for TSMC's additional fabs will be based on the needs of its customers. The fourth fab will also produce wafers on the same nodes, while the fifth and sixth will use more advanced technologies.
TSMC's Q2 revenues reached an impressive $31.7 billion USD, growing 38.6 percent year-over-year. The high-performance computing segment was up 14 percent from the previous quarter, and demand for chips used in AI accelerators grew significantly, accounting for 60 percent of revenues for the quarter.
Despite persistent threats of tariffs from the Trump administration, TSMC's second quarter results were strong. The company anticipates that US production will account for roughly 30 percent of the company's 2nm and smaller process tech. TSMC's CEO, CC Wei, stated that the company is working on speeding up the volume production schedule of its second US fab by several quarters, and production schedule for the third fab may be sped up due to strong AI-related demand from customers.
In March, TSMC announced a $100 billion foundry expansion, which includes the construction of three additional fabs in the US. TSMC serves major U.S. chip designers including Nvidia, Apple, and AMD, and smartphones accounted for 27 percent of TSMC's revenues for the quarter, while IoT and automotive both accounted for 5 percent.
Looking ahead to the third quarter, TSMC remains cautiously optimistic about its customers' behavior, but acknowledges potential risks from tariff policies. The timeline for when TSMC's additional fabs will begin operation remains vague, but the company's commitment to increasing U.S. production of leading-edge chips is clear.
- TSMC's expansion plans include the construction of three additional fabs in the US, aiming to produce 30% of its most advanced chips in Arizona using AI and high-performance computing technologies.
- In the second quarter, demand for chips used in AI accelerators grew significantly, accounting for 60% of TSMC's revenues, indicating a strong interest in AI-related technology within the finance and business sectors.
- The rapid expansion of TSMC's US operations, driven by the increasing demand for AI and high-performance computing, is likely to impact the broader technology industry, particularly in the fields of finance, business, and the internet of things (IoT).
