TrendForce’s latest findings reveal that Taiwan Semiconductor Manufacturing Company (TSMC) has announced it’s increasing investment in U.S. advanced semiconductor manufacturing, bringing the total to US$165 billion. Mass production is expected to begin after 2030 if the three newly planned fabs proceed on schedule. The U.S., which has been actively expanding its advanced semiconductor capacity, is projected to hold 22% of the global market share by 2030.
TrendForce notes that TSMC first announced plans for its Arizona fab in 2020 as part of a six-fab expansion strategy, aiming to mitigate geopolitical risks. However, escalating trade tensions and tariff issues have forced the company to accelerate its expansion timeline.
Since 2018, global trade conflicts and the COVID-19 pandemic have accelerated supply chain fragmentation, with governments worldwide striving to establish localized semiconductor production. TrendForce data from 2021 indicates that Taiwan accounted for 71% of global advanced node capacity and 53% of mature node capacity. However, by 2030, Taiwan’s advanced process share is expected to decline to 58%, while its mature process share will drop to 30% as the U.S. and China ramp up their semiconductor manufacturing capabilities.
Expanding U.S. investments is a strategic necessity as U.S.-based clients represent the largest share of TSMC’s advanced node adoption. TSMC is also establishing two advanced packaging plants and a R&D center for HPC applications in addition to three new fabs. Arizona is set to become TSMC’s leading overseas technology hub, ensuring comprehensive service for key clients.
While expanding U.S. production reduces concentration risks, it could also lead to higher costs for U.S. IC customers. These increased expenses may trickle down to higher component and end-product prices, potentially affecting consumer purchasing behavior.
TSMC’s Arizona Phase 1 has just entered mass production, while Phase 2 and Phase 3 are still under construction, with mass production expected between 2026 and 2028. The actual timeline for the newly announced fabs remains uncertain, with no immediate impact on the industry in the short term. However, in the mid-to-long term, the cost implications and potential price increases across the supply chain will be key factors to watch.
Arizona has a booming semiconductor industry, driven by major investments from companies like Intel and TSMC. The state offers a strong infrastructure, skilled workforce, and business-friendly policies, making it a hub for chip manufacturing. Intel has multiple fabs in Chandler, while TSMC is building a $40 billion facility in Phoenix. All of which is ensuring that Arizona’s semiconductor sector is playing a crucial role in the U.S. push for domestic chip production, supported by federal initiatives like the CHIPS Act.
