Taiwan Semiconductor Manufacturing Company (TSMC), the world's leading contract chipmaker, has made a bold move by announcing a $100 billion expansion of its Arizona chip fabrication facilities. This move has sent ripples throughout the semiconductor industry, raising questions about its implications for TSMC, its customers, and the global semiconductor landscape. This report provides an in-depth analysis of this investment, addressing key questions and concerns from a semiconductor/tech professional perspective.
Breakdown of the $165 Billion Investment
TSMC's total investment in the US is projected to reach $165 billion , making it the largest single foreign direct investment in US history . This investment will be spread across several years and includes the following:
- Initial Investment ($40 billion): This covers the first two fabs at the Arizona site. Fab 1, which cost $12 billion initially and $28 billion after expansion , started volume production of 4nm chips in late 2024 , and Fab 2 is slated to produce 3nm chips starting in 2028.
- Second Investment ($25 billion): This funded the third fab at the Arizona site, which is expected to produce 2nm chips by the end of the decade.
- Latest Investment ($100 billion): This will fund three new fabs (Fabs 4, 5, and 6), two advanced packaging facilities, and an R&D center . The technology nodes for these new fabs haven't been officially disclosed, but they are expected to focus on advanced nodes, including 3nm, 2nm, and potentially even the more advanced 1.6nm node .
Capacity and Technology Node Comparisons
While the exact capacity of the Arizona fabs is not publicly available, it's estimated that by 2030, the US could hold 22% of the global market share for advanced chips, up from just 10% in 2021 . However, even with this expansion, Taiwan is projected to maintain at least 80% of TSMC's production capacity by 2030 , including the majority of its advanced nodes.
