TSMC’s $100B US Investment Advances with New Arizona Plant

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Taiwan Semiconductor Manufacturing Company has started building its third fabrication plant in Arizona. This milestone represents a major step in TSMC’s long-term strategy to boost US-based semiconductor manufacturing. With the addition of this facility, Arizona becomes the company’s largest operational footprint outside of Taiwan.

The expansion is part of a broader $100 billion plan aimed at diversifying chip production and reducing dependency on overseas manufacturing. More than $65 billion of that investment has already been earmarked for projects in the United States. The new factory will join two others under development in north Phoenix, where chip production is expected to include 4-nanometer and 3-nanometer technologies.

Once complete, the third plant will focus on producing 2-nanometer chips. These components are critical for powering high-performance computing systems, advanced mobile processors and artificial intelligence servers. The project is seen as a key step in aligning US-based capabilities with the most advanced chip technologies available globally.

TSMC’s investment will reshape the local economy and workforce in Arizona

Beyond its technical significance, the project carries major economic implications. The construction effort is expected to create more than 40,000 jobs, including direct construction roles and supporting positions across various sectors. In the long term, the plant will generate thousands of permanent jobs in high-tech fields such as semiconductor engineering and automated manufacturing.

According to the Arizona Commerce Authority, the broader economic impact of TSMC’s investment could exceed $200 billion. This will likely drive growth across real estate, logistics and education, as institutions adapt to meet the increasing demand for specialized technical skills.

Arizona has several advantages that make it attractive for advanced manufacturing. These include favorable tax structures, competitive land and energy costs and a growing technology ecosystem.

TSMC’s advanced capabilities align with the needs of leading US tech firms

TSMC’s Arizona expansion is designed to support the needs of major US clients, including Apple, NVIDIA and AMD. Producing 2-nanometer chips domestically could help these companies reduce their reliance on overseas supply chains and improve production speed and flexibility.

For these firms, sourcing chips from a US-based plant enhances both operational security and responsiveness. As chip complexity increases, especially for applications involving machine learning and autonomous systems, geographic proximity to fabrication facilities becomes a competitive advantage.

TSMC’s growing presence in the United States also highlights the shift in demand toward localized manufacturing for high-end nodes. This is particularly relevant as global demand for cutting-edge computing infrastructure continues to rise.

TSMC’s expansion receives bipartisan support under the CHIPS and Science Act

TSMC’s developments are closely tied to the CHIPS and Science Act, a legislative initiative passed in 2022 to revitalize the US semiconductor industry. The act provides $52 billion in federal funding and incentives to support domestic chip production and research.

Federal and state officials have signaled strong support for TSMC’s projects in Arizona, citing the company as a model for private-public cooperation. TSMC’s facilities are among the most significant foreign direct investments in the US technology sector and have received expedited construction permits and potential eligibility for federal subsidies.

Sources:

• eTeknix