tsmc begins production of advanced chips in arizona
Phoenix, Monday, 13 January 2025.
Taiwan Semiconductor Manufacturing Company (TSMC) has started mass production of 4-nanometer chips at its Arizona facility. This marks a significant expansion of its operations in the United States. The production utilizes TSMC’s advanced A16 chip manufacturing technology, which is critical for meeting the demands of American tech companies. The facility benefits from significant U.S. government support, including $3.9 billion in subsidies from the CHIPS Act. The total investment in the Arizona factory is projected to be $65 billion, aiming to complete in three phases by 2030. This move is part of TSMC’s strategy to mitigate geopolitical tensions and strengthen its presence in the U.S. semiconductor market. U.S. Commerce Secretary Gina Raimondo highlighted the milestone as unprecedented, emphasizing that the chips produced locally match the quality of those made in Taiwan. This development could reshape the global semiconductor landscape.
Production capacity and investment details
The Arizona facility’s first phase is set to achieve a production capacity of 30,000 wafers by Q2 2025 [1]. The ambitious project involves three phases, with a total planned capacity of 90,000 wafers per month [1]. TSMC has increased its investment commitment to $65 billion, up by $25 billion from initial plans, demonstrating strong confidence in U.S. operations [2][5]. The company will receive $6.6 billion in federal subsidies, with an additional $660 million allocated for initial operations [1].
Manufacturing technology and quality standards
U.S. Commerce Secretary Gina Raimondo has confirmed that the facility’s yield rates and quality standards match those of TSMC’s Taiwan operations [2][6]. The plant employs TSMC’s advanced A16 chip manufacturing technology [1][2]. Looking ahead, the second phase will introduce 3nm chip production by Q3 2027, while the third phase, scheduled to begin construction in 2025, aims to start operations by Q3 2028 [1].
Market impact and strategic implications
The semiconductor sector has shown sensitivity to this development, with TSMC shares experiencing a 4% decline [3]. Production costs at the Arizona facility are notably higher, with chips priced 30% above those manufactured in Taiwan [3]. The U.S. aims to produce 20% of global advanced chips by 2030 [2][5]. This expansion represents a strategic shift in global semiconductor manufacturing, though TSMC maintains that its U.S. operations will remain 1-2 generations behind Taiwan’s capabilities [1].