TSMC has announced that it will ramp up production earlier than originally expected at its second fab in Arizona as it aims to shift nearly a quarter of its cutting-edge wafer output within the United States.
At the end of 2024 the Taiwanese giant foundry began production at its first fab site in Arizona, which will serve major US chip designers such as Nvidia and Apple. According to a transcript of the Q2 earnings call held by TSMC on Thursday, CEO CC Wei announced that construction of its second US fab is now complete. The fab will produce parts using TSMC’s 3nm node. He told analysts during the call that
“We’re seeing strong interest from our leading US customers and are working on speeding up the volume production schedule by several quarters to support their need,” construction of TSMC’s second US fab, which is set to produce parts on its 3nm process node, has been completed.
Efforts by TSMC to accelerate its US build out are amidst uncertainty caused by Trump’s inconsistent and often erratic trade policies. The US president has imposed a 10 percent tax on all imports into the US. He briefly imposed a 32% tarifffor Taiwanese products before delaying it. He has also teased the possibility that foreign-made semiconductors could be subject to a 100 percent import duty.
Facing this specter in March, TSMC increased its US investments by announcing a 100 billion dollar foundry expansion. This would see the construction three additional fabs along with previously announced advanced packaging and R&D centers in the region. Wei estimates that, when completed, approximately 30 percent of TSMC’s 2nm process technology will be located in Arizona. Wei says that the timeline for these facilities to begin operations is still vague. “the construction and ramp for those fabs will be based on our customers’ needs.”
However, work has already started on the third Arizona fab, which will produce wafers using its 2nm process nodes and A16 process. He added: “We will look into speeding up the production schedule as well based on the strong AI related demand from our customers,”
Wei stated that its fourth fab would also produce wafers using these same nodes, while the fifth and six will use more advanced technology. We wouldn’t be shocked if, when the third and fourth factories are completed, they are reconfigured to make more advanced chips. This is similar to the first fab, which was originally designed for the N5 node, but then upgraded to N4. Intel is cutting 5,000 jobs
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Despite Trump’s persistent threat of tariffs, TSMC did well in the second quarter. The company reported that Q2 revenues grew 38.6 % year-over-year, to $31.7 billion USD (933.80 billion TWD).
The net income for the quarter was $13.5 billion (397.6 billion TWD), largely due to the strong demand for leading edge nodes from the foundry operator, which now accounts for about 74 percent wafer revenue.
The demand for chips used as AI accelerators also increased during the quarter. Huang reported that the high-performance computing segment grew by 14 percent compared to the previous quarter, and accounted 60 percent of the quarter’s revenues. Wei is cautiously optimistic about the third quarter. “Looking into the second half of 2025, we have not seen any change in our customers’ behavior so far. However, we understand there are uncertainties and risks from the potential impact of tariff policies, especially on consumer-related and price-sensitive end market segments.” (r)
