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TSMC Accelerates Arizona Chip Production to 2027 Amid AI Boom

TSMC has accelerated the mass production schedule for its second Arizona wafer fabrication plant to the second half of 2027, responding to strong demand from American clients. The company has begun construction on a third Arizona fab and is planning a fourth, aiming to create a "megafab cluster" to supply chips for AI and smartphones. Internationally, TSMC is advancing projects in Japan and Germany while ramping up production of its advanced 2-nanometer process in Taiwan. However, Chairman C.C. Wei has expressed concerns about whether Taiwan's power supply can keep pace with the company's domestic expansion plans.

Key Points: TSMC Moves Arizona Fab 2 Production to 2027

  • Arizona Fab 2 production moved to 2027
  • Third Arizona fab construction started
  • Investing $100B in US expansion
  • 2nm process ramping up in Taiwan
  • Global builds in Japan and Germany
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TSMC advances Arizona Fab 2 mass production to second half of 2027

TSMC accelerates mass production at its second Arizona fab to 2027, expands global footprint with new plants in Japan and Germany.

"due to strong demand, production will accelerate this year. - C.C. Wei"

New Delhi, January 16

Taiwan Semiconductor Manufacturing Co. moved forward the mass production schedule for its second wafer fab in Arizona to the second half of 2027. According to a report by Focus Taiwan, Chairman & CEO C.C. Wei announced the adjustment from the previously planned 2028 timeline during an investor conference on Thursday. Wei stated the decision to accelerate the schedule followed strong demand from American clients who urged the company to hasten production.

The chairman confirmed that construction of a third fab in Arizona already started, with equipment installation scheduled to begin later this year. The company is currently applying for a permit to build a fourth fab and an advanced IC assembly plant. TSMC is investing USD 100 billion to construct three more fabs, two IC assembly plants, and a research and development center.

Regarding expansion flexibility, Wei noted that TSMC acquired a large parcel of land in Arizona. He said the company aims to build the Arizona complex into a "megafab cluster" to meet demand for chips used in smartphones, artificial intelligence applications, and high-performance computing devices.

While addressing reports of further commitments linked to potential tariff reductions, Wei did not respond directly but emphasized the flexibility provided by the new land acquisition.

The company's international expansion includes a facility in Kumamoto, Japan, where the first fab started mass production at the end of 2024. Wei said construction of a second Japanese fab began, though the schedule for commercial production depends on client needs and market conditions. Similarly, construction in Dresden, Germany, proceeded well, with mass production timelines also contingent on market demand.

In Taiwan, TSMC continued building several fabs in Hsinchu and Kaohsiung using the advanced 2-nanometer process. Mass production of the 2nm process started in the fourth quarter of last year, and Wei said that "due to strong demand, production will accelerate this year."

Chief Financial Officer Wendell Huang noted 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," the report said.

- ANI

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Reader Comments

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Priya S
$100 billion investment! 🤯 That's the scale we need to think about. Our semiconductor mission is a good start, but seeing this makes me wonder if we're moving fast enough. Attracting a player like TSMC to India would be a game-changer for 'Make in India'.
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Rohit P
Interesting that they're worried about power supply in Taiwan. That's a lesson for us too. If we want to build fabs here, 24/7 reliable power is non-negotiable. Hope our states are preparing the necessary infrastructure.
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Sarah B
Working in tech, the demand for advanced chips is insane, especially for AI. TSMC's expansion in US, Japan, and Germany shows the global rush. India has the talent pool; we need to create the ecosystem. The DLI scheme needs more aggressive implementation.
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Karthik V
While this is impressive, let's not forget the geopolitical angle. TSMC's moves are heavily influenced by US-China tensions. India's policy should be smart and focused on self-reliance, not just attracting foreign investment. We need our own TSMC in the long run.
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Meera T
The scale is mind-boggling. A "megafab cluster". Hope our leaders are taking notes. We have the ISRO and DRDO scientists who can do amazing things. We need to channel that expertise into commercial semiconductor manufacturing with a clear, long-term vision.

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