The Arizona plant will provide semiconductor services to major tech companies, but pricing is likely to be significantly higher.
TSMC’s ambitious expansion into the U.S. is finally taking shape, as the company prepares to begin production at its Arizona facility next year. From the enactment of the CHIPS Act to the construction of one of the most extensive overseas facilities, the Taiwanese giant has made significant progress. Reports suggest that TSMC’s 4nm process will be produced in the Phase 1A section of the Arizona plant, but production costs are projected to be 30% higher than in Taiwan—an important consideration for U.S.-based customers.
The Arizona plant is initially expected to produce 20,000 wafers per month, with primary customers being Apple, Nvidia, AMD, and Qualcomm. While the first phase will focus on 4nm production, TSMC plans to produce 2nm chips in the second phase by 2028, although this timeline remains uncertain, particularly due to disputes over "technology transfer" between the U.S. and Taiwan.
Another noteworthy point highlighted in the reports is that production costs at the Arizona facility are expected to be significantly higher than sourcing directly from Taiwan. TSMC’s production costs in Arizona are said to be around 30% higher, primarily due to the lack of materials to stabilize yield rates and the shortage of semiconductor supply chain infrastructure in the U.S.
As mainstream tech companies begin sourcing from TSMC’s Arizona plant, they may face higher costs, which could ultimately be reflected in consumer product pricing. TSMC will play a crucial role in the future of the U.S. semiconductor industry and its evolution under the Trump administration, which had a contentious relationship with TSMC’s U.S. operations.