TSMC's US operations have struggled since their initial launch in 2021, and after four 'rough' years, the Arizona plant has now reported profitability.
TSMC's Expansion Towards the US Has Been a Costly Venture, But The Chip Giant Is Playing the 'Long Ball' Game
TSMC's expansion into America isn't just driven by political motives; instead, the chip giant recognizes that diversifying production is becoming a 'must' amid the geopolitical risks it faces. The CHIPS Act initially catalyzed the Biden administration's pivot towards Arizona, which laid out initial investment plans. Since 2021, TSMC Arizona has reported operating losses totaling $1.25 billion over four years. However, in TSMC's latest financial report, Arizona reported a profit-sharing of NT$16.14 billion, turning its losses after four years of struggle into a profit.
The Taiwan chip giant has been heavily focused on its US operations, and especially during the Trump adminstration, TSMC plans to massively ramp up its investments in the region, reaching up to $250 billion, according to official disclosures. Right now, the company plans multiple chip fabs, advanced packaging centres, and R&D facilities in Arizona alone, with the intention of bringing cutting-edge chip production to the A16 (1.6nm) node in just a few years.
As for how TSMC achieved profitability in 2025, a large credit goes to the upscaling of its chip production lines to 4nm last year, which enabled it to serve orders for AMD's Ryzen processors, NVIDIA's Blackwell, and other clients. TSMC's Fab 21, one of the first plants in Arizona, is reported to be seeing wafer output of 10,000 to 30,000 per month. Since the Arizona 'GigaFab' is divided into multiple phases, TSMC plans to upgrade its production soon, shifting towards 3nm by early 2027. However, TSMC's Arizona output is nowhere close to the production scale in Taiwan.
TSMC's US shift is constrained by the difficulty of manufacturing in the region, and profitability is hindered by factors such as higher labour and equipment costs, as well as the immaturity of the nation's chip supply chain. Despite these factors, the Taiwan chip giant has doubled down on its commitment to America's semiconductor industry resiliency, given that fabless manufacturers are demanding that TSMC ensure it can mitigate geopolitical risks in the event of a hostile situation in Taiwan.
TSMC's Japan, Kumamoto plant, along with its Dresden, Germany, Fab, has also reported operating losses, underscoring how difficult it is to diversify production away from Taiwan.
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.
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