TSMC Embraces Advanced Chip Production in the U.S. with $65 Billion Arizona Expansion Plan
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading contract chipmaker, has officially confirmed a significant strategic shift—one that marks a historic milestone for U.S. semiconductor ambitions. According to Vice President Peter Cleveland (via Focus Taiwan), the company is no longer hesitant about bringing its most advanced chipmaking technology to American soil. TSMC now plans to construct its third fab in Phoenix, Arizona, as part of a larger commitment to support U.S. technological leadership in artificial intelligence (AI) and beyond.
“We have not started to break ground on our third wafer fab in Phoenix. We would like to start next week. We're going to build those (high-end chips) in Phoenix to sustain the U.S.'s AI leadership.” — Peter Cleveland, VP, TSMC
A Dramatic Shift in TSMC’s Offshore Strategy
This development represents a significant departure from TSMC’s previous reluctance to transfer its most advanced nodes outside of Taiwan, largely due to concerns around technology sovereignty and geopolitical stability. With an estimated $65 billion investment across three fabs in Arizona, TSMC aims to make the U.S. its “second home,” establishing a more distributed and secure semiconductor manufacturing supply chain.
First fab: Now operational, producing chips on the 4nm node. AMD is among the first major customers with orders for its Ryzen CPUs.
Second fab: Will focus on 3nm and 2nm chips, with early reference to the A16 (1.6nm) node—indicating TSMC’s roadmap for scaling even beyond 2nm.
Third fab: Planned for production of high-end AI-centric chips, aligning with U.S. priorities to dominate the next wave of innovation in artificial intelligence.
Trump’s Pressure Tactics and U.S. AI Aspirations
TSMC’s accelerated expansion into the U.S. market is widely seen as a direct result of strategic pressure applied during the Trump administration, which urged foreign firms to localize semiconductor manufacturing and reduce dependency on Asia. Despite past resistance—particularly from the Taiwanese government, which had restricted 2nm production from being built offshore—it now appears that TSMC has shifted its posture, citing geopolitical and business imperatives.
Analysts suggest that TSMC’s 2nm node currently yields above 60%, a promising signal as the company prepares to deploy this technology in Arizona in the near future. The A16 process (1.6nm) is reportedly on track for H2 2026 availability in Taiwan, and TSMC’s roadmap indicates that the U.S. will receive this advanced node roughly two years later, still within a globally competitive window.
Long-Term Implications for the Semiconductor Industry
Cleveland noted that, over time, the U.S. could account for up to 75% of TSMC’s business, a transformative shift that could redefine the geography of chip manufacturing. This includes potential deprioritization of certain European projects, further concentrating TSMC’s foreign capacity in the United States.
With its Arizona fabs, TSMC will not only support U.S. tech giants but also catalyze a new era of public-private cooperation in semiconductor leadership. While implementation will take years, the foundation is now firmly laid for a resilient, U.S.-anchored semiconductor ecosystem.
What are your thoughts on TSMC producing 2nm and even 1.6nm chips in the U.S.? Do you think this marks a new era in global chipmaking leadership? Let us know in the comments!
