TSMC to Produce 30% of Its Advanced 2nm Chips in the US

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, announced plans to manufacture 30% of its 2nm-class (N2) semiconductor output in the United States.

During its earnings call lastg week, company executives revealed that the Arizona-based Fab 21 site will become an independent, cutting-edge semiconductor manufacturing hub.

"After completion, around 30% of our 2nm and more advanced capacity will be located in Arizona, creating an independent leading-edge semiconductor manufacturing cluster in the U.S.," said TSMC CEO and chairman C.C. Wei. "This will also enable economies of scale and support a more robust semiconductor supply chain ecosystem in the U.S."

To meet these goals,TSMC—whose key clients include Apple and NVIDIA—will construct two additional Fab 21 modules. This expansion will support production of chips using N3 (3nm), N2 (2nm), and A16 (1.6nm) process technologies.

While Taiwan will continue to host the majority of TSMC’s advanced manufacturing—via new fab modules in Hsinchu and Kaohsiung Science Parks—the Arizona expansion marks a significant shift in the company’s global strategy.

TSMC’s Arizona facility reported a loss of nearly NT$14.3 billion in 2023, making it the company’s most financially burdensome overseas site to date. In stark contrast, TSMC’s Nanjing operations delivered a solid profit of approximately NT$26 billion during the same period.

According to a report from Economic Daily News, the Arizona subsidiary has recorded continuous losses over the past three years—NT$4.81 billion in 2021, NT$9.43 billion in 2022, and NT$10.92 billion in 2023. This brings the total accumulated losses to over NT$39.4 billion since operations began.

The report suggests that 2025, expected to be the first full year of mass production at the Arizona fab, could help reduce financial losses. However, it also cautions that ongoing capital investment may continue to weigh on profitability in the near term.

Nonetheless, the company reported a 60% year-on-year increase in net profit for the first quarter, surpassing market forecasts as demand for semiconductors powering artificial intelligence applications continues to surge.

TSMC posted a net profit of NT$361.6 billion (approximately $11.12 billion) for the January–March period, up from NT$225.5 billion a year earlier.