December 5, 2023

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TSMC will pour $40 billion into two Arizona chip fabs

TSMC will pour $40 billion into two Arizona chip fabs

Forward-looking: Taiwanese giant TSMC has officially confirmed it will build an additional fab for chip manufacturing in the US. The Arizona site will grow, the investment will skyrocket and the number of newly-created jobs will make politicians very, very happy.

Taiwan Semiconductor Manufacturing Company (TSMC) will expand its building and manufacturing efforts on US soil in a rather significant way. After many rumors, unofficial confirmations and high-level interviews, the much awaited announcement has finally become official. TSMC’s Arizona site is growing, nay it’s swelling, brimming with jobs and billions of dollars of investments.

TSMC says its new venture will represent the largest foreign direct investment in Arizona history, and one of the largest foreign direct investments in US history. The company will spend $40 billion overall, building not just one but two different fabs with an already scheduled production (starting from 2026) of 3nm-based chips in the second fab.

There will be over 10,000 construction workers employed at the site, TSMC said, and the two fabs are expected to create 10,000 high-paying tech jobs including 4,500 jobs directly from TSMC. Once completed, the Arizona fabs will have a total manufacturing output of 600,000 wafers per year, with an estimated end-product value of more than $40 billion.

The first Arizona fab is expected to come online in 2024, making chips with TSMC’s N5 family of manufacturing processes – N5, N5P, N4, N4P, and N4X. Its production capacity will be 240,000 wafers per year. The second fab will almost quadruple the company’s investment, bringing the N3 family of process nodes to the US some years after being used in Taiwan-based productions.

Even though the Arizona site is the company’s largest investment overseas, TSMC will indeed continue to keep its most advanced and up-to-date chip manufacturing technology on Taiwan soil for quite some time. The 3nm node will still be considered advanced in 2026 but the chip manufacturing market could be very different by then.

Other companies have also announced a spending increase to create new US-based chip manufacturing capabilities. Intel will spend $20 billion for a new facility in Columbus, Ohio, while Samsung will invest $17 billion in Austin, Texas. The Korean giant could go even further, spending up to $200 billion for 11 different manufacturing plants in the area.

Speaking at the TSMC facility, President Joe Biden said “American manufacturing is back.”