apple silicon production shifts stateside as tsmc ramps up arizona fabs
Phoenix, Thursday, 17 July 2025.
tsmc is accelerating its Arizona plant construction. This is partially to produce Apple chips in the United States. The move is driven by the CHIPS Act and aims to boost domestic semiconductor production. A significant 30% of TSMC’s advanced 2nm chip capacity will be based in Arizona. Initially, the plan was to ship chips to Taiwan for packaging. Now, TSMC will establish chip-packaging facilities in the U.S. The first Arizona plant has already begun mass production of 4nm chips.
Increased manufacturing capacity
TSMC is accelerating the construction of its second and third plants in Arizona to meet the growing demand for smartphone and AI computing chips [1]. TSMC plans to invest $65 billion in three wafer fabs located in Phoenix, Arizona [2]. The initial factory is set to produce 4nm chips, followed by 3nm chips at the second, with the third planned for 2nm or more advanced technology by approximately 2030 [2]. Once fully operational, these factories are projected to produce around 20% of the world’s advanced chips [2].
Geopolitical risk mitigation
The acceleration of TSMC’s Arizona plants is driven by U.S. policy pressures and customer demand [2]. This move reduces geopolitical risks by establishing an independent, leading-edge semiconductor manufacturing cluster in the U.S. [1]. TSMC’s increased U.S. presence underscores a shift towards localizing the semiconductor supply chain [2]. This localization is a strategic response to global uncertainties [2]. The establishment of domestic chip-packaging facilities further strengthens supply chain resilience [1].
Challenges and delays
TSMC’s Arizona project has faced significant challenges [2]. These challenges include a shortage of skilled labor and construction-related issues [2]. Initially slated to begin production in 2024, the start date was revised to late 2025 due to these hurdles [2]. As of July 14, 2025, TSMC announced a delay in the start of production at its Arizona plant [2]. The plant currently employs 2,200 workers, with half being Taiwanese expatriates due to recruitment difficulties [2].
Market leadership and stock implications
TSMC’s commitment to expanding its U.S. manufacturing capabilities reinforces its market leadership [3][4][5]. The company’s Q2 net profit increased by 60%, demonstrating the positive impact of AI-driven demand [6]. TSMC is accelerating the increase of production capacity of its Arizona plant [3][4]. The fifth and sixth wafer fabs in Arizona will adopt more advanced technologies [3][4]. Approximately 30% of TSMC’s N2 capacity will eventually be located in Arizona [3][4][5].