TSMC has completed construction of its second Arizona semiconductor facility ahead of schedule, according to supply chain sources, as the world’s largest contract chipmaker responds to mounting pressure for American manufacturing while preserving Taiwan’s central role in its operations.
The facility, designed for 3-nanometer production, finished construction earlier than planned with equipment installation set to begin in September next year and first wafer output targeted for 2027. The accelerated timeline compresses the typical fab construction period to roughly two years, reflecting customer demands driven by artificial intelligence applications.
The rushed expansion benefits Taiwanese facility engineering companies including Hantang and Marketech, which gained experience from the first Arizona plant. However, the rapid buildout comes as TSMC prepares another round of price increases, with wafer costs expected to rise 3% to 5% globally next year while US facility pricing adjustments could exceed 10%.
Despite the Arizona push, Taiwan remains indispensable to TSMC’s operations. Advanced packaging capabilities, particularly the CoWoS technology critical for AI chips, will continue operating exclusively in Taiwan. The company simultaneously builds nine new facilities and 11 production lines domestically this year, including 2-nanometer capacity in Kaohsiung scheduled for equipment installation in the third quarter.
The timing reflects broader geopolitical pressures, with TSMC’s total US investment now reaching $165 billion across six planned fabs. Yet the reliance on Taiwan for the most sophisticated processes underscores the practical limits of semiconductor reshoring efforts, even as American customers demand domestic production options.
