TSMC bets on packaging, delays pricey lithography
- TSMC will open a chip-packaging plant in Arizona by 2029 to relieve packaging bottlenecks for advanced chips. - The company also said it will delay deploying ASML’s high-NA EUV production machines through 2029 over cost concerns. - That combination prioritizes packaging capacity while deferring very expensive lithography upgrades, reshaping where chipmakers spend capex next ( ).
TSMC is putting its next big U.S. chip bet into packaging in Arizona, while pushing back its use of ASML’s newest lithography machines through 2029. (reuters.com, bloomberg.com) Kevin Zhang, TSMC’s deputy co-chief operating officer, told Reuters on April 22 that the company plans to open an advanced chip-packaging plant in Arizona by 2029. Reuters reported the move is aimed at easing a packaging bottleneck for artificial-intelligence chips such as Nvidia’s, which combine several chip pieces inside one package. (reuters.com) Bloomberg reported the same day that TSMC has no current plan to use ASML’s high-numerical-aperture extreme ultraviolet machines in production through 2029. Zhang said the tools are too expensive, and Bloomberg said each machine sells for more than €350 million, or about $410 million. (bloomberg.com) Packaging is the step after the silicon is made, when chiplets and memory are wired together into one finished module. TSMC has been expanding its CoWoS packaging line for artificial-intelligence processors, and the company said in March 2025 that its U.S. expansion would include its first U.S. advanced-packaging investment to build a domestic AI supply chain. (reuters.com, tsmc.com) Lithography is the stage where chip patterns are printed onto silicon with light, and ASML is the only company that sells extreme ultraviolet systems for the most advanced chips. ASML says its first high-NA EUV system was delivered in December 2023 and that the platform is intended for high-volume manufacturing in 2025 and 2026. (asml.com) TSMC’s decision shows a different spending order than the one many investors expected from the race to smaller process nodes. On April 23, TSMC said its new A13 process is scheduled for production in 2029, one year after A14, even as Bloomberg reported the company plans to get there without putting high-NA EUV into volume production first. (tsmc.com, bloomberg.com) The Arizona move also fits TSMC’s broader U.S. buildout. TSMC said in March 2025 that it intended to expand its U.S. investment to $165 billion, adding a third Phoenix fab, two advanced-packaging facilities, and a research-and-development center; its Arizona site says more than 3,000 employees already work there. (tsmc.com, tsmc.com) For ASML, the delay from its biggest customer is a near-term setback, even though the company says high-NA tools are designed to print smaller features with fewer process steps. For TSMC, the immediate priority is getting more advanced chips assembled and shipped, not buying the costliest new tool first. (asml.com, bloomberg.com, reuters.com)
