Taiwan Semiconductor Manufacturing Co (TSM) is sending shockwaves through the semiconductor industry with its monumental $65 billion investment in Arizona. This bold move isn’t just about expanding production; it’s about reshaping the global balance of power in advanced chipmaking. The implications are far-reaching, affecting not only the US and Taiwan, but also South Korea and the entire technological landscape.
According to a TrendForce Corp report cited by the Taipei Times, the US is poised to significantly increase its share of the advanced semiconductor market. By 2027, it’s projected to claim 21% of the market, a massive leap from its current 9%. This surge is directly fueled by TSM’s investment, securing the US a likely second-place position globally.
TSM’s commitment to Arizona involves the construction of two advanced fabrication plants (fabs). The first, focusing on 4nm processes, is slated to begin production in 2024. A second fab, utilizing 3nm processes, will follow in 2028. The company’s ambitions extend even further, with plans for a third fab employing 2nm or even more advanced technology by 2030. This long-term vision underscores TSM’s confidence in the US market and its strategic importance.
This massive expansion in Arizona comes with substantial financial backing. TSM has secured up to $6.6 billion in US subsidies and a further $5 billion in proposed loans, demonstrating the US government’s unwavering commitment to bolstering domestic semiconductor production and reducing reliance on foreign sources. This mirrors the broader strategic focus on semiconductor self-sufficiency amidst growing global competition.
While the US gains momentum, Taiwan’s dominance, though maintained, will see a slight shift. TrendForce predicts a decrease in Taiwan’s share of advanced integrated circuit (IC) processes, from 71% to 54% by 2027. However, it’s crucial to note that Taiwan will remain the undisputed global leader in this sector. South Korea, currently holding 11% of the market, is also projected to experience a decline, falling to 9% and dropping to third place.
TSM’s strategic expansion isn’t limited to Arizona. The company is simultaneously pursuing aggressive domestic and international growth. Over the next decade, it plans to build new factories annually within Taiwan, targeting locations such as Kaohsiung, Tainan, and Taichung. Further international projects include a second facility in Japan’s Kumamoto region (construction starting in 2025) and continued development of its advanced plants in Dresden, Germany. Innovative advanced packaging technologies, like CoWoS and SoIC, will also continue to play a pivotal role in TSM’s strategy, ensuring the company stays at the forefront of semiconductor innovation.
The sheer scale of TSM’s expansion is reflected in its projected capital expenditures. The company forecasts a record-breaking investment of between $34 billion and $38 billion in 2025 alone, underscoring its commitment to growth and technological advancement. This ambitious spending is further exemplified by recent partnerships, such as its collaboration with Advanced Micro Devices (AMD) to leverage its 3nm process for smartphones, challenging industry giants like Samsung.
With a year-to-date surge of over 82% in its stock price, TSM’s aggressive expansion and strategic partnerships signal a powerful force in the reshaping of the global semiconductor landscape. The company’s moves highlight the crucial role semiconductors play in the global economy and the fierce competition driving innovation and investment in this critical sector.
