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TSMC is experiencing a surge in demand from its U.S. customers, leading the company to accelerate the expansion of its production lines by several quarters.
TSMC’s Arizona Fab Expected to Introduce Cutting-Edge Nodes Way Earlier Than Original Timeline
The Taiwanese chip giant is rapidly expanding facilities in America due to significant adoption from companies like NVIDIA, Apple, and AMD. TSMC’s Arizona fab is reportedly fully booked for upcoming capacity needs. According to a report by the Taiwan Economic Daily, there is urgency within TSMC US to expand production capacities. The first Arizona fab was originally scheduled for high-volume manufacturing (HVM) in 2025 but is now set to begin by Q4 2024. Similarly, the second fab’s start date has been pushed forward by almost a year.
TSMC anticipates bringing N2 (2nm) and A16 (1.6nm) processes into U.S. facilities by 2028. The company’s overall node roadmap is accelerated by at least four quarters, marking a significant acceleration. The demand in the U.S. is mainly driven by the AI frenzy, with NVIDIA currently using most of the production lines. Additionally, Application-Specific Integrated Circuits (ASICs) will play a crucial role in adopting TSMC’s cutting-edge processes since every firm seeks the best nodes.
Recently reported, TSMC’s Arizona operations became profitable for the second consecutive quarter. However, they still have diluted gross profit margins, and producing in the U.S. is an expensive venture. Over the coming years, TSMC’s Arizona operations are expected to expand and include advanced packaging facilities, R&D centers, and newer fabs catering to the massive demand.
It will be intriguing to see how significant a role TSMC plays in shaping the future of the U.S. chip industry since no other chip firm in the region is seeing such large demand, even compared to native chipmaking firms like Intel.
