tsmc's us expansion: apple, nvidia, and amd lock in chip supply

2025-05-12 tsmc

Phoenix, Monday, 12 May 2025.
major tech firms like apple, nvidia, amd, qualcomm, and broadcom have already reserved the entire production capacity of tsmc’s three new us plants. us government policies are designed to boost domestic manufacturing. geopolitical concerns also drive the demand for secure, local chip production. this move highlights the critical need for a reliable, geographically diverse semiconductor supply chain, with companies securing their access to advanced chips well in advance.

us expansion and manufacturing capacity

TSMC’s decision to expand its manufacturing footprint in the U.S. reflects a strategic response to growing demand and geopolitical considerations [1]. The U.S. government’s push for domestic semiconductor production, coupled with concerns over supply chain security, has incentivized TSMC to invest heavily in U.S.-based facilities [1][4]. TSMC is planning to start building its third and fourth fabs in Arizona later this year [5]. The company’s first fab in Arizona began volume production in the fourth quarter of 2024 [5]. These new plants will not only increase TSMC’s overall production capacity but also provide a more geographically diverse manufacturing base [5].

geopolitical risks and market leadership

Geopolitical tensions, particularly between the U.S. and China, have amplified the need for a secure and localized chip supply [1]. By establishing a stronger presence in the U.S., TSMC aims to mitigate risks associated with potential disruptions in its primary manufacturing base in Taiwan [1][5]. This strategic move reinforces TSMC’s position as the world’s leading semiconductor foundry, ensuring it can continue to serve its major clients without interruption [2]. TSMC’s monthly revenue reached 349.567 billion New Taiwan dollars, showing a 22.2 percent increase month-on-month and a 48.1 percent increase year-on-year [1].

stock implications and financial performance

The strong demand for TSMC’s U.S. plant capacity and its overall expansion plans are likely to have positive implications for its stock (TSM:NYSE) [3]. Analysts suggest the market has sufficient funds, as indicated by the strong performance of low-level and reorganized stocks [1]. TSMC’s April sales surge, driven by U.S. tariffs, further supports this positive outlook [3]. TSMC’s Q1 profit surged by 60% and beat forecasts, demonstrating strong financial performance [3]. Despite growing trade war fears, TSMC is sticking with its 2025 outlook [3].

analyst perspectives and future outlook

Analysts view TSMC’s strategic initiatives favorably, noting that urgent orders following the suspension of equal tariffs have contributed to its record-breaking performance [1]. The company’s commitment to innovation, with plans for 2 nm chip production in Arizona, further solidifies its competitive edge [3]. TSMC aims to produce 30% of its 2nm chips in Arizona [3]. TSMC’s facility in Phoenix, Arizona, is expected to start mass production by the end of 2027 or early 2028 [6]. TSMC is boosting 2 nm yields by 6%, with mass production expected to begin in late 2025 [5].

Bronnen

TSMC US Expansion