TSMC is speeding up its U.S. manufacturing ambitions, with plans to advance production at its second Arizona facility by a full year while introducing cutting-edge packaging technology to the American market.
The world’s largest contract chipmaker has seen extraordinary demand for its U.S.-based capacity, with production slots sold out through late 2027, according to industry sources familiar with the matter. The company’s Arizona expansion comes as major clients like Apple, AMD and Nvidia push for more geographic diversification in their supply chains.
The accelerated timeline will see equipment installation for TSMC’s second Arizona fab beginning this September instead of late 2026 as initially planned. This will enable 3-nanometer chip production to commence by late 2027, although still behind Taiwan’s manufacturing schedule.
In a strategic move to enhance its U.S. operations, TSMC will also introduce fan-out panel-level packaging (FOPLP) technology to its American facilities. Unlike Samsung’s approach using plastic materials, TSMC is developing glass-based FOPLP technology, which offers better thermal management – a critical factor for advanced AI processors.
The company had previously been evaluating partnerships with Taiwanese display manufacturers like Innolux, but ultimately decided to develop the technology in-house after determining panel makers couldn’t meet the precision requirements for advanced packaging processes.
TSMC’s chairman C.C. Wei has personally confirmed the FOPLP development is in full swing, with the technology expected to enter small-scale trial production by 2027. Industry analysts note that while more expensive than traditional packaging methods, the technology’s expanded surface area allows for more efficient chip production.
Despite the U.S. expansion, TSMC officials have repeatedly emphasized that Taiwan will remain the company’s primary manufacturing hub. The Arizona facilities will initially produce chips at a 25-30% premium compared to those made in Taiwan.
