TSMC Expands in Arizona

Taiwan Semiconductor Manufacturing Co. plans to open a chip-packaging plant in Arizona by 2029, extending its U.S. buildout beyond wafer fabrication. (finance.yahoo.com) Packaging is the stage where finished silicon is combined with memory and other chiplets into one working module, and it has become a choke point for artificial-intelligence processors. Reuters reported that the Arizona site is expected to handle advanced methods including CoWoS and 3D integrated circuits, which TSMC uses for high-performance chips. (finance.yahoo.com) (3dfabric.tsmc.com) TSMC’s Arizona campus already includes three planned fabrication plants in Phoenix. TSMC says the first fab is on track for 4-nanometer production in the first half of 2025, the second is set for 2-nanometer and 3-nanometer production in 2028, and the third broke ground in April 2025 for N2 and A16 technologies by the end of the decade. (tsmc.com) (pr.tsmc.com) The packaging addition fills in a missing step in the U.S. supply chain. Reuters said chips made in Arizona would otherwise have to be sent back to Taiwan for advanced packaging before they could be delivered to customers such as Nvidia and Apple. (finance.yahoo.com) Washington has been pushing that gap for more than two years. The Commerce Department and TSMC announced in April 2024 that the company could receive up to $6.6 billion in CHIPS Act direct funding, while the National Institute of Standards and Technology has separately been running a National Advanced Packaging Manufacturing Program to expand U.S. packaging capacity. (pr.tsmc.com) (nist.gov) TSMC is adding that U.S. capacity while holding back on one of the industry’s newest tools. In an April 23 report, Yahoo Finance said TSMC told investors that ASML’s high-numerical-aperture extreme ultraviolet machines are too expensive for now, even as ASML expects the systems to enter high-volume production in 2027 and 2028. (finance.yahoo.com) That stance keeps TSMC apart from Intel, which said in 2024 that it planned to be the first chipmaker to use ASML’s high-NA EUV tools for its 14A process. Reuters reported then that TSMC did not think it needed the machines for its A16 technology, and the tools were priced at about $373 million each. (finance.yahoo.com) TSMC’s own roadmap still leans on more established equipment for its next nodes. The company says N2 volume production is scheduled for the second half of 2026, and its Arizona third fab is targeting N2 and A16 output by the end of the decade. (tsmc.com 1) (tsmc.com 2) By 2029, Arizona is slated to have TSMC fabs making leading-edge wafers and a local plant assembling those wafers into finished AI packages. The buildout is getting deeper in the United States, but TSMC is still choosing where to spend on the most expensive tools. (finance.yahoo.com 1) (finance.yahoo.com 2)