TSMC's Fab 2 in Arizona to begin mass production in 2nd half of 2027

Taipei, Jan. 15 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC) has pushed up the mass production schedule for its second wafer fab in the U.S. state of Arizona to the second half of 2027 from the previously planned 2028, Chairman C.C. Wei (魏哲家) said Thursday.

At an investor conference, Wei said the move to push the schedule ahead was due to strong demand from its American clients, who had urged the company to accelerate production.

Wei said construction of the third fab in Arizona has started, with equipment installation slated to begin later this year.

Meanwhile, the company is also applying for a permit to build a fourth fab and an advanced IC assembly plant, Wei added.

TSMC is investing US$65 billion to build three fabs in Arizona, with the first starting commercial production in the fourth quarter of 2024.

The chipmaker has also pledged to invest an additional US$100 billion to build three more fabs, two IC assembly plants and a research and development center.

On Monday, the New York Times reported that TSMC would commit to building at least five fabs as part of discussions linked to a possible reduction in U.S. tariffs on Taiwanese goods from 20 percent to 15 percent.

Although Wei did not respond directly to the New York Times report, he did state that TSMC has acquired a large parcel of land in Arizona to allow the company more flexibility for expansion.

According to Wei, TSMC aims to build its Arizona complex into a "megafab cluster" to meet strong demand from its clients for chips used in smartphones, artificial intelligence applications and high-performance computing devices.

In Kumamoto, Japan, Wei said the first fab started mass production at the end of 2024 and construction of the second fab has begun, with the schedule for commercial production to depend on clients' needs and market conditions.

In Dresden, Germany, Wei said fab construction has proceeded well, and when mass production will commence will also depend on clients' needs and market conditions.

In Taiwan, TSMC is building several fabs in Hsinchu and Kaohsiung using the advanced 2-nanometer process, Wei said, adding that over the next few years his company will also pour funds into more sophisticated chip technology development and IC assembly service expansion.

TSMC started mass production of the 2nm process in Hsinchu and Kaohsiung in the fourth quarter of last year, and Wei said that due to strong demand, production will accelerate this year.

However, Chief Financial Officer Wendell Huang (黃仁昭) said that as the 2nm process ramps up, depreciation costs are expected to rise and affect TSMC's gross margin by 2-3 percentage points this year.

While TSMC continues to invest in Taiwan, Wei said he has concerns over whether the power supply will meet the needs of the company's expansion.

In response, the Ministry of Economic Affairs said there was "no need to worry about power supply in the country," citing its own generation and demand projections for 2032, without providing supporting figures.