TSMC U.S. Facility Capacity Sold Out Until 2027

On March 6, TSMC's CEO and Chairman, Dr. C.C. Wei, announced during a press conference that the company is expanding its U.S. production capacity due to strong customer demand and the full reservation of its Arizona facility's capacity until the end of 2027.

This announcement follows a joint declaration by Dr. Wei and former U.S. President Donald Trump on March 4 at the White House, confirming that TSMC will reinvest at least $100 billion in the U.S. to build three new wafer fabs, two advanced packaging plants, and one R&D center. This will bring TSMC's total investment in the U.S. to $165 billion. Dr. Wei emphasized that this expansion will not impact the company's ongoing plans in Taiwan.

The decision to increase U.S. production is driven by TSMC's key U.S. customers, including Apple, AMD, Broadcom, NVIDIA, and Qualcomm, who have requested the company to ramp up local manufacturing, despite the 25% to 30% higher production costs in the U.S. compared to Taiwan.

In light of the political uncertainty surrounding potential tariffs on Taiwanese-made chips, which former President Trump threatened to impose at rates between 25% and 100%, Dr. Wei did not clarify whether these customers' demand for local production increased before or after the tariff discussions. While the U.S. government is unlikely to significantly increase chip prices overnight, political uncertainty has influenced TSMC's decision-making process.

Dr. Wei assured that the $165 billion U.S. investment plan would not detract from the company's commitment to Taiwan's semiconductor industry. TSMC remains focused on expanding its local production capacity, acknowledging that current capacity is still insufficient to meet demand.

Additionally, Dr. Wei revealed that TSMC plans to launch 11 new production lines in Taiwan this year. This includes the Fab 20 facility near Baoshan in Hsinchu County, which will become a key wafer fab for producing chips using the N2 and A16 manufacturing processes (2nm and 1.6nm nodes). This facility will serve as TSMC's primary hub for these processes until the second N2 fab near the Southern Taiwan Science Park in Kaohsiung becomes operational in 2026. As demand for all process technologies continues to grow, TSMC is also expanding its advanced (7nm and below), mature, and specialty node capacities in Taiwan.