Taiwan Semiconductor Manufacturing Company (TSMC) plans to invest an additional US$100Bn in the USA, adding to a US$65Bn investment supported by the CHIPS and Science Act of 2022.

TSMC’s CEO, C. C. Wei, announced that the company would establish three additional fabrication facilities and two packaging facilities in Arizona, USA. This significant investment aims to strengthen the US–Taiwan relationship and enhance economic and trade relations. Moreover, high-end chip production in the USA offers an alternative source of chips as demand continues to rise, driven by increasing data centre requirements.

TSMC has already begun constructing three plants in Arizona. The first fab was announced in 2020, with an estimated US$12Bn investment over eight years. By 2021, the company had broken ground on the first facility (Fab 21), which was expected to enter production by 2024, producing 5-nanometer (nm) chips. However, Fab 21 officially produced 4nm chips in Q4 2024, a generation ahead of the originally proposed 5nm technology. The second fab is anticipated to begin production in 2028, manufacturing 3nm technology

Production of the latest generation of intellectual property is restricted by Taiwanese laws outside its borders. For instance, if TSMC’s 3nm chips are the newest generation, only 4nm and older generations can be manufactured outside Taiwan. Therefore, any delays in technological advancement will likely cause subsequent production delays in the USA.

Leading the industry in technological advancement, TSMC’s high-end chips currently set the benchmark. At present, 3nm technology is commercially produced by TSMC. Samsung, which also produces 3nm technology, has recently increased yield rates but is yet to meet the required rates for companies, such as Nvidia, to use in their products.