tsmc's arizona fab: a who's who of tech giants are lining up
Phoenix, Monday, 2 June 2025.
tsmc’s arizona-based fab is experiencing high demand. Apple is the leading customer, but nvidia, amd, qualcomm, and broadcom are also expected to utilize the facility’s capacity. The fab is particularly important for nvidia’s ai chip production. This surge highlights the strategic importance of tsmc’s us presence. It also shows its ability to secure orders from major players. Some analysts are predicting that tsmc’s revenue could double as a result of this increased demand.
capacity utilization and revenue prospects
The strong demand for tsmc’s arizona fab is expected to boost the company’s revenue. Industry experts suggest that the fab’s capacity will be fully utilized this year by major clients like apple, nvidia, amd, qualcomm, and broadcom [1]. Nvidia’s ai chip production will be a key driver [1]. Tsmc chairman wei zhejia mentioned in april that with investments in the arizona facility, approximately 30% of advanced processes below 2 nm will be produced there, supporting the demands of these large clients [1]. This robust demand may lead to a doubling of tsmc’s revenue as the arizona fab reaches economic scale [1].
geopolitical considerations and manufacturing costs
Geopolitical factors are driving the demand for tsmc’s us-based manufacturing [1]. Clients are seeking geographically diverse backup options. This trend is amplified by the trump administration’s support for domestic manufacturing [1]. However, tsmc’s clients have noted that the company has been increasing prices, and is expected to continue to do so [1]. These price adjustments are attributed to varying factory locations and the rising costs associated with advanced process nodes driven by ai, particularly the shift from 5 nm to 3 nm and 2 nm [1].
tsmc’s response to expansion rumors
Recent reports have suggested that tsmc is considering building a ‘gigafab’ in the united arab emirates (uae) and has discussed this with u.s. officials [3][6]. This potential project would involve constructing six factories, similar to the arizona site [3]. However, tsmc has officially stated that it does not comment on market rumors and remains focused on its existing expansion plans [3]. These plans include the arizona fab, which began 4 nm production in the fourth quarter of last year, and a second fab slated for 2028 [3].
shareholder focus at upcoming meeting
Tsmc’s annual shareholder meeting is scheduled for june 3, 2025 [4]. Key topics of interest include the progress of the arizona fab, potential impacts of semiconductor tariffs, and the effects of new taiwan dollar appreciation on revenue and profit [4]. Concerns about potential semiconductor tariffs imposed by the trump administration are particularly significant [4]. Tsmc has cautioned that tariffs could increase production costs and reduce demand, affecting the profitability of u.s. companies and their ability to fund research and development [4].
currency fluctuations and operational outlook
The recent appreciation of the new taiwan dollar is also a concern for shareholders [4]. Tsmc’s second-quarter operating targets were based on an exchange rate of approximately 32.5 new taiwan dollars to the u.s. dollar [4]. With the current rate around 30 new taiwan dollars, there has been an appreciation of about 7.7% [4]. Tsmc estimates that every 1% appreciation in the new taiwan dollar impacts gross margin or operating profit by 0.4 percentage points [4]. This could result in a difference of 3.08 percentage points from original estimates [4].