TSMC's Arizona project proceeds well but faces water, labor challenges

Taipei, May 11 (CNA) Taiwan Semiconductor Manufacturing Co.'s (TSMC) investment project in Arizona has progressed better than expected, but it still faces challenges such as water and labor shortages, National Development Council (NDC) head Yeh Chun-hsien (葉俊顯) said Monday.

Speaking with reporters after visiting TSMC's Arizona hub and attending the SelectUSA Investment Summit in Maryland last week, Yeh said TSMC's Arizona site turned a profit of NT$16.14 billion (US$514 million) in 2025 in its first full year of mass production.

"TSMC told me it was surprised by the smooth trial run of the first fab, which has left the company optimistic about the project's outlook," Yeh said.

The first fab at TSMC's Arizona campus began mass production in the fourth quarter of 2024, while construction of a second fab has been completed, with mass production scheduled to begin in the second half of 2027.

Construction of a third fab started earlier this year.

The three fabs were the centerpieces of TSMC's US$65 billion initial investment project in Arizona. The chipmaker also announced an additional US$100 billion investment plan to build three more fabs, two IC assembly facilities and one research and development center in the U.S. state.

The company has said previously that it had secured a large parcel of land near its current facilities in Arizona for future expansion, but it has not provided a clear timetable for new facilities under the US$100 billion plan.

Though Yeh said TSMC voiced optimism over the project's future, he said the company told him it still faced several challenges, including water shortages.

Yeh said Arizona's dry climate has made securing sufficient water resources a major concern for TSMC, which hopes to receive support from the Arizona state government.

In past, including in April 2023, TSMC has tried to allay fears that water would be a problem, saying it had plans for comprehensive water treatment and recycling facilities in Arizona that would meet the needs of its advanced wafer fabs.

TSMC is also seeking to ensure a stable power supply for its Arizona facilities, Yeh said, and it also faces complex state environmental and electricity consumption regulations.

In addition, the company has also had trouble obtaining visas for overseas hires as labor shortages remain another concern, Yeh said, without going into further detail about any of the specific issues.

Meanwhile, Yeh said TSMC is hoping Taiwanese upstream suppliers of semiconductor chemicals and equipment will follow it to the United States, though such investments would require regulatory revisions.