TSMC's US operations are currently 'booming', to the point that the chip giant cannot find sufficient capacity for fabless customers in the region.
TSMC's Arizona Plant 4, Responsible For Cutting-Edge Chip Production, Is Fully Booked Despite a 2030 Production Timeline
TSMC Arizona is known for the scale of production the facilities intend to achieve by the end of the decade, but at the same time, the current rate of expansion is 'too slow' to meet the gigantic demand coming from the likes of NVIDIA, Apple, and AMD. A report by Taiwan Economic Daily reveals that demand for homegrown semiconductors has reached new heights, to the point that fabless customers are looking to pre-book capacity that doesn't yet exist. The report mentions that Fab 4, which is expected to scale up to 2nm or the A16 process, is now entirely booked, despite the production timeline set for the end of the decade.
Industry observers note that major US manufacturers such as Apple, Nvidia, AMD, and Qualcomm are increasing their demand for backup production in other locations due to geopolitical factors. TSMC's steady expansion of its overseas plants, especially in the United States, can reassure its American customers.
- Taiwan Economic Daily
The idea with this report is that interest in US chip production has been growing significantly over the past few quarters, and we know that customers like NVIDIA and AMD are already having their silicon fabbed at the first Arizona plant. At the same time, geopolitical constraints have brought in great interest into TSMC's US operations, which is why all of the major fabless firms are looking to get access to TSMC's Arizona production as soon as possible, but even then, the capacity is limited to just a few customers, likely NVIDIA, AMD, and Apple.
Taiwan's total investment in the US semiconductor industry is intended to scale up to half a trillion dollars, and this also includes other suppliers like Foxconn and Quanta setting up their manufacturing units. However, for TSMC, it has become an immediate priority to boost the company's expansion plans in the US, as customers seek a 'safer option' for their foundry orders amid geopolitical troubles, and Taiwan isn't one of them. This is one of the reasons why it is expected that by 2028, more than 20% of TSMC's total chip output will come from overseas facilities.
This also opens up opportunities for the likes of Intel and Samsung Foundry, and while the latter has been successful in attracting attention from NVIDIA, Tesla, and Apple, Intel still has a long way to go. For fabless customers, diverting production away from TSMC isn't just a risky bet; it also imposes several constraints, including changing product architectures. At the same time, they will have to find a fine line between not getting their silicon produced and incurring the overhead of switching away from TSMC.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
Follow Wccftech on Google to get more of our news coverage in your feeds.
