TSMC plans to scale up its operations in America at a rapid pace, as announced during the recent earnings call, including the acquisition of a second piece of land to expand the Arizona fabs.
TSMC to Acquire a Second Piece of Land For Its Arizona Fabs To Bring Cutting-Edge Chip Production to the US
The Taiwan giant is currently witnessing extraordinary demand for its chip production in the US, mainly driven by AI and how clients like NVIDIA, AMD, and Apple are pursuing manufacturing in America. TSMC is the primary supplier of cutting-edge semiconductors in the US, with the Arizona facilities mass-producing the 4nm process at the time of reporting. However, at the Q3 earnings call, TSMC's CEO expressed the intention to bring N2 and beyond technologies to the US, and also announced plans to secure a second piece of land to expand the Arizona facilities.
We are making tangible progress and executing well to our plan. In addition, we are preparing to upgrade our technologies faster to N2 and more advanced process technologies in Arizona, given the strong AI related demand from our customers.
Furthermore, we are close to securing a second large piece of land nearby to support our current expansion plans and provide more flexibility in response to the very strong multiyear AI related demand.
It seems like TSMC is now fully committed to expanding its production facilities in the US to cater to the massive demand coming their way. More importantly, C.C. Wei has expressed TSMC's intentions to bring N2 in Arizona as well, which shows that the intent to shift cutting-edge chip production to America is defintely there, and based on the timeline we are seeing, Taiwan might just be a few years ahead of the US in terms of the technology being produced, and the gap will narrow done once N2 is in production in Arizona.
The expansion of the Arizona facility from the existing six fabs clearly shows that the ability to produce high-end semiconductors in the US is there. TSMC will become the second entity, after Intel, to introduce a 2nm node size in America, and this could happen as early as H2 2026. There are also plans to scale up to A16 (1.6nm) production in Arizona, which is driven by the fact that US clients account for a large share of TSMC's revenue. Therefore, the transition of production from the East to the West is a necessary step for the firm.
It will be interesting to see whether TSMC manages to meet the expectations of US clients in terms of scaling up operations in the US, but by the looks of it, the Taiwan giant is fully committed to the 'Made in USA' narrative.
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