Taiwan Semiconductor Manufacturing Co.’s US subsidiary posted quarterly profit of NT$41 million ($1.3 million), down sharply from NT$4.23 billion ($131 million) in the previous quarter. The decline reflects mounting depreciation and installation costs as the chipmaker prepares its second Arizona facility for 3-nanometer production scheduled for 2027.
The first Arizona plant achieved profitability after entering volume production late last year, but analysts expect near-term pressure on US operations as capital expenditures accelerate. TSMC’s N2 process, featuring gate-all-around transistors, will enter high-volume production in the second half of 2025, with the Arizona site eventually handling a portion of this advanced manufacturing.
Equipment suppliers report semiconductor manufacturers are focusing next year’s investments on GAA and backside power delivery technologies for 2-nanometer nodes. However, these same suppliers face intensifying price pressure, with mature-process clients demanding cuts exceeding 15% as competition from Chinese manufacturers escalates.
The divergence between advanced and mature nodes is widening. While AI-driven demand keeps leading-edge capacity tight and prices elevated, mature-process equipment orders have contracted sharply following aggressive Chinese capacity expansion through 2023. Suppliers increasingly compete on price to secure orders.
Taiwanese equipment manufacturers including those in specialty chemicals and materials stand to benefit from continued advanced packaging expansion. Yet industry executives acknowledge that sustained investment in next-generation processes remains essential despite near-term cost pressures, particularly as Chinese competitors aggressively pursue market share across all segments.
