TSMC's Arizona facility is reportedly on track to begin mass production of 4nm chips in the second half of 2025, with major tech companies like Apple, NVIDIA, AMD, and Qualcomm expected to be among its primary customers. However, production costs are projected to be significantly higher than in Taiwan.
This marks a major milestone in TSMC's US expansion, following the passage of the CHIPS Act and the construction of one of the largest foreign chip fabrication plants. According to a report by Yonhap, the Arizona facility's Phase 1 (1A) plant will start producing 4nm wafers, initially outputting around 20,000 units per month. Phase 2 will see a move to 2nm production in 2028, although this remains uncertain due to "technology transfer" disputes.
Higher Production Costs in Arizona
One significant aspect of TSMC's Arizona operations is the higher production costs. The report claims that manufacturing in Arizona will be about 30% more expensive than in Taiwan. This is attributed to factors like the lack of necessary materials in the US for stable yield rates and the current limitations in the US semiconductor supply chain.
These increased costs are likely to be passed on to clients sourcing from TSMC Arizona, potentially impacting consumer product pricing. TSMC's Arizona facility will be a critical factor in the evolution of the US semiconductor industry, especially given political discussions around trade. The Trump administration was not particularly fond of the way TSMC has been operating in the US.
Related: Qualcomm Rumored To Be Optimistic About Forming A Dual-Sourcing Approach From Samsung & TSMC
