[Taiwan Chip News] TSMC to Start Construction of Arizona Fab 3 Within the Year... Accelerating US Semiconductor Production Expansion

Trump Administration's 'Tariff' Pressure
Construction to Begin This Year, Mass Production Targeted for 2028
$40 Billion Investment Planned for Arizona Alone
Plans to Establish Advanced Packaging Plant Also Under Review

TSMC, the world's largest foundry (semiconductor contract manufacturing) company based in Taiwan, plans to complete its third factory in Arizona, USA, by mid-next year and will begin construction this year. It appears that the construction schedule was accelerated due to the 'tariff bomb' imposed by the second Trump administration. The groundbreaking ceremony, expected to take place in June, will invite key U.S. officials to express the intention to expand local production in the United States. Additionally, the company is also considering establishing an advanced packaging technology (CoWoS) factory in the U.S.

According to industry sources on the 17th, Wei Zhejia, Chairman of TSMC, recently held a separate meeting with executives of the Arizona branch in the U.S. and made this decision. Following the announcement of the construction plans for the first and second factories in Arizona in 2022, TSMC is officially set to begin construction of the third factory this year. TSMC expects the construction of the third factory to take about 18 months. The third factory is planned to start trial production in early 2027 and begin mass production in 2028. This timeline is about a year and a half earlier than originally announced.

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This decision is interpreted as a strategic move by TSMC to respond to pressure from the U.S. government and the global semiconductor supply chain restructuring. It demonstrates the company's commitment to expanding production capacity within the U.S. and transferring advanced processes and packaging technologies to the country. The U.S. government has been pressuring major semiconductor companies, including TSMC, to strengthen domestic production capabilities in the semiconductor industry. Although TSMC's board of directors did not attend this meeting, it is believed that discussions took place through communication between TSMC's U.S. branch government relations department and the White House during the U.S. business trip.

Moreover, on the 13th (local time), the Trump administration announced it would impose customized 'reciprocal tariffs' on countries worldwide as early as early April. U.S. President Donald Trump reaffirmed his intention to consider imposing tariffs on automobiles, semiconductors, and other sectors, emphasizing, "We must ensure that semiconductors are manufactured in our country (the U.S.). Taiwan took our semiconductor business. We want that business to come back."

Recently, TSMC has been responding swiftly. Previously, TSMC announced it would invest a total of $40 billion (52 trillion KRW) in Arizona, including the construction of the third factory. Furthermore, it is known that TSMC plans to dispatch additional Taiwanese employees to the Arizona factory. This represents the largest investment in a single region within the U.S. This decision also signifies TSMC's acceleration of the entry of advanced processes into the U.S. TSMC's expanded investment in the U.S. is expected to contribute to strengthening semiconductor production capacity domestically in the short term and enhancing cooperative relations with the U.S. government.

TSMC also plans to invite key U.S. officials to the groundbreaking ceremony to express its intention to expand investment in the U.S. The invitation process is expected to take place within a few months, and the industry estimates that the event will be held in June this year. This will likely serve as an official occasion for TSMC to declare its commitment to strengthening cooperation with the U.S. government and expanding semiconductor production capacity within the U.S. Regarding this, TSMC stated, "We will not respond," adding, "Everything will follow the company's official announcements."

TSMC's second factory has completed the main building construction and is currently undergoing internal cleanroom and electromechanical integration work, with plans to transfer equipment by the end of the first quarter of next year. Trial production is scheduled to begin by the end of next year, aiming for mass production in the second half of 2027.

Additionally, plans to establish an advanced packaging factory in the U.S. are also under consideration. Previously, TSMC entrusted this construction plan to packaging company Amkor and packaging and testing specialist ASE. Amkor has already submitted plans to establish a factory in Arizona, but ASE has stated that it needs to evaluate the plan carefully.

Taiwan Economic Daily News = Jian Yongsang / Translation = Asia Economy