tsmc's us factory to boost chip production in early 2025
Phoenix, Monday, 30 December 2024.
Taiwan Semiconductor Manufacturing Co. (TSMC) is gearing up to start production at its new factory in the United States by early 2025. This facility will initially produce 10,000 wafers per month, marking a significant expansion for TSMC in the U.S. market. The move comes as the company seeks to enhance its production capabilities amid changing geopolitical landscapes. The U.S. factory is part of TSMC’s strategy to address global supply chain stability and reduce reliance on Taiwan-based production. This development is expected to positively impact TSMC’s stock performance and aligns with broader efforts to strengthen U.S. semiconductor manufacturing capabilities. With the backing of major tech companies and government support, TSMC’s new facility could play a pivotal role in reshaping the semiconductor industry in the United States.
Market dominance and expansion strategy
TSMC’s strategic expansion comes from a position of remarkable market strength. The company has increased its semiconductor foundry market share from 52% in 2019 to 64.9% as of the third quarter of 2024 [2]. The Arizona facility, set to commence 4-nanometer chip production in early 2025, will receive $6.6 billion in CHIPS Act funding [5]. This expansion represents the largest foreign direct investment in Arizona’s history, with total capital expenditure exceeding $65 billion [2].
Production capabilities and technological advancement
The initial phase of the Arizona facility will produce 10,000 wafers monthly [1]. A second fab is planned for 2028, which will focus on more advanced 2-nanometer and 3-nanometer chips [2][5]. The project has attracted support from major tech giants including Apple, Nvidia, Google, Amazon, and Qualcomm, who are seeking to diversify their supply chains beyond Taiwan [5]. Early performance indicators are promising, with yields reportedly exceeding those of TSMC’s Taiwan facilities [5].
Economic impact and growth projections
Industry analysts project significant growth for TSMC in the coming year. Taiwan’s semiconductor industry output is expected to exceed NT$6 trillion by the end of 2025, with TSMC anticipated to achieve a 20% growth rate [4]. This growth will be primarily driven by artificial intelligence chip demand, including orders for NVIDIA’s B200 and B300 chips, as well as specialized processors for smartphones and computers [4].