For some time now, the United States has been trying to boost the growth of the local production of tech products. One of the segments they have focused on is semiconductor manufacturing. The CHIPS Act was born as a product of that initiative. TSMC, the world leader in chip manufacturing, will start production in the 4nm process at its Arizona plant in H2 2025.
The establishment of TSMC’s Arizona plant was driven by both the company’s efforts and funding from the CHIPS Act. Having the industry’s biggest name start manufacturing chips in the United States could create a pull effect for others. That’s exactly what the US government wants, especially since trade tensions with China are rising.
TSMC Arizona to produce 4nm chips starting in H2 2025; 2nm projected for 2028
According to reports, TSMC will start producing 4nm chips at its Arizona plant in H2 2025. The project will have multiple phases, with Phase 1 being able to offer a wafer output of 20,000 units per month. TSMC plans to start Phase 2 of the project in 2028 to produce 2nm chips. There is still a lot of work ahead to achieve this, mainly due to issues related to “technology transfer” between the US and Taiwan.
TSMC’s Arizona plant will supply big names like Qualcomm, Nvidia, Apple, and AMD. That said, production prices are estimated to be 30% higher than those in Taiwan. This is primarily because the US lacks certain key materials necessary to stabilize yield rates. Maintaining a high yield rate on wafers is especially important to avoid problems like those that Samsung Foundry has been experiencing.
So, the company will have to invest extra in obtaining these materials to guarantee production at economically viable levels. The US also doesn’t have many dedicated supply chains for chipsets, so TSMC will have to spend money to set up some. Companies that source from TSMC Arizona are likely to see their product prices reflect the increase in production costs. The government could offer incentives to offset the losses and boost the growth of the US supply chain.
A big move for TSMC in multiple ways
Setting up factories in the US might be a much bigger move for TSMC than it seems. This year, investigators found Huawei using AI chips manufactured by the company. This went against US trade restrictions and raised questions about TSMC. The company’s response was to stop the production of AI chips for Chinese companies. The Taiwanese firm also started an investigation into the matter to try to gain the favor of American officials.
Also, Donald Trump, the new president of the United States, said that Taiwan stole American chip technology. These allegations would also implicate TSMC. Trump even hinted at the possibility of imposing tariffs on Taiwanese chips. He might change his mind, though, if there are local supply chains that bring in money and jobs for the US.
