TSMC's U.S. Packaging Bet

TSMC plans to open an advanced chip-packaging plant in Arizona by 2029, adding a step that many U.S.-made chips still have to leave the country to complete. (reuters.com; finance.yahoo.com) Deputy co-chief operating officer Kevin Zhang told Reuters on April 22 that the plant would come online by 2029. TSMC had said in its January earnings call that it was seeking permits to start building its first advanced packaging plant in an existing Arizona facility, but had not given a start date then. (reuters.com; finance.yahoo.com) Packaging is the stage where several chip pieces are combined into one finished part, a step that has become critical for artificial intelligence processors from companies such as Nvidia. Reuters reported that this stage has been a bottleneck for AI chip supply, which is why TSMC is adding it in Arizona instead of only making wafers there. (reuters.com; finance.yahoo.com) The Arizona move fills in a missing piece of TSMC’s U.S. buildout. TSMC said in March 2025 that it would raise its total planned U.S. investment to $165 billion, on top of an existing $65 billion commitment, with more fabs, two advanced packaging facilities, and a research and development center in Phoenix. (pr.tsmc.com; azcommerce.com) TSMC’s original Arizona plan called for a first fab to start 4-nanometer production in 2024 and a second fab to start 3-nanometer production in 2026. The packaging plant means more of the manufacturing chain could stay in Arizona instead of moving back across the Pacific for final assembly. (pr.tsmc.com; reuters.com) At the same event in Santa Clara, TSMC also said it will not deploy ASML’s newest high numerical aperture extreme ultraviolet machines through 2029. Bloomberg reported that Zhang said the company has no current plans to adopt the tools, which sell for more than €350 million, or about $410 million, each. (bloomberg.com; msn.com) Extreme ultraviolet machines are the printers that etch the smallest features onto silicon, and high-NA is ASML’s newer, more precise version. Reuters reported on April 22 that TSMC says it can keep shrinking chips with its current tools, including its A13 process, which it expects to put into production in 2029. (reuters.com; money.usnews.com) That leaves TSMC stretching older lithography equipment while adding newer packaging capacity in the United States. The company is still localizing more work in Arizona, but the timetable it laid out this week runs to 2029, not the faster schedule many chip-policy advocates had hoped for. (reuters.com; bloomberg.com)