TSMC Secures Additional Land in Arizona to Meet AI Chip Demand

TSMC has secured additional land at its Arizona facility to respond to the growing demand for artificial intelligence (AI) semiconductors. While this move aims to expand its production base in the U.S., the company acknowledged that it may not be able to meet all U.S. customer demands in the short term.

On June 4, TSMC Chairman and CEO C.C. Wei spoke with reporters following the company's annual shareholder meeting in Hsinchu, Taiwan. He stated, "The two sites we have already secured in Arizona are sufficient for our expansion plans in the U.S. over the next decade."

In January, TSMC completed the acquisition of its second site in Arizona. This allows the company to gradually increase its production facilities using both the existing and newly acquired land. TSMC explained that this move is intended to address strong AI-related demand and to create room for expanding its production base in Arizona.

The company is investing a total of $165 billion (approximately 255 trillion won) in Arizona. The first factory began mass production of 4-nanometer chips in the fourth quarter of last year, while the second factory aims to start production of 3-nanometer chips in the second half of 2027. A third factory is planned to handle advanced processes below 2 nanometers.

However, securing land does not immediately translate to increased supply. Wei noted, "Customer demand is very high, and TSMC is working hard to avoid becoming a bottleneck in the supply chain, but there are limits to the quantities we can support." He added, "It will take a long time to fully meet U.S. customer demand with domestic production alone."

There are also constraints on expansion. Wei mentioned that achieving the existing goal of deploying 30% of U.S. production capacity for chips below 2 nanometers is becoming increasingly difficult due to delays in environmental permits and a shortage of construction workers.

Wei clarified that the expansion in the U.S. does not replace Taiwan's core competitiveness. He stated, "Taiwan will maintain a significant advantage in the AI industry, as research and development for advanced processes and initial mass production will still begin in Taiwan."

In response to Samsung Electronics' claim that it would catch up to TSMC in the foundry sector within ten years, Wei countered, "There is no way they will catch up in a few years." He emphasized that an ecosystem encompassing backend processes, testing, assembly, and electronics manufacturing has been established around TSMC in Taiwan.

* This article has been translated by AI.

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