tsmc's arizona expansion faces unexpected hurdle
phoenix, Monday, 28 July 2025.
the us treasury secretary revealed a construction bottleneck impacting tsmc’s arizona wafer fabs. this snag threatens to slow down the company’s $40 billion us investment. us treasury secretary scott bessent noted regulatory delays. he said regulators halt work for minor plan deviations. the delay could affect tsmc’s stock and overall chip production goals. tsmc hopes to produce 7% of the chips needed by the united states. the bottleneck could have broader implications for the semiconductor industry.
regulatory hurdles slow arizona fab construction
The construction of tsmc’s wafer fabs in Arizona faces delays due to regulatory issues [1]. Us treasury secretary scott bessent pointed out that us regulators often halt construction for minor deviations from the original plan [1]. Bessent noted that these regulatory hurdles slow down the progress of tsmc’s $40 billion investment in the united states [1]. These delays could potentially impact tsmc’s stock performance (tsm) due to the uncertainty surrounding its us expansion [1].
impact on tsmc’s manufacturing capacity
The delays in tsmc’s arizona expansion could significantly impact its manufacturing capacity [1]. Tsmc’s chairman, mark liu, stated that the second fab in the us would use 3-nanometer process technology [1]. He also mentioned plans to accelerate mass production [1]. Furthermore, the third fab is slated to use 2-nanometer and a16 process technologies, with accelerated production planned due to strong ai demand [1]. Bessent estimates that the arizona fabs might only meet 7% of the chip demand in the united states [1].
geopolitical risks and diversification
The us expansion is critical for mitigating geopolitical risks associated with tsmc’s reliance on taiwanese manufacturing [7]. As geopolitical tensions rise, having a more geographically diverse manufacturing base becomes increasingly important [7]. The arizona fabs are intended to provide a secure supply of chips for the us market [7]. These fabs could potentially reduce reliance on manufacturing in taiwan [7]. Intel is also aiming to regain some of apple’s business [7]. Apple may use intel as a second source to reduce risks [7].
japanese investment as a potential solution
A recent agreement between the us and japan may provide financial support for tsmc’s us expansion [2][3]. Japan’s chief trade negotiator, akazawa yoshisei, indicated that a $550 billion investment deal could finance tsmc’s us fabs [2][3]. The japanese government may offer loans and guarantees through state-run banks [2][3]. This financial support could help tsmc overcome the financial challenges posed by construction delays [2][3]. This agreement could help reduce tariffs on japanese exports to the us [3].
potential competition from intel
Intel is positioning itself to compete with tsmc for advanced chip manufacturing orders [7]. Intel is providing early samples of its 14a process design kit to potential clients, including nvidia and apple [7]. There is a possibility that apple could use intel’s 14a process for its m-series chips [7]. This would mark a shift from tsmc’s exclusive hold on apple’s m-series chip production [7]. Intensified competition could affect tsmc’s market share and stock performance [7].