September 9, 2024 TSMC has made significant strides with its $65 billion investment in chip manufacturing in their new Arizona fabrication plant. The have successfully achieved production yields on par with its Taiwan facilities during early trial runs.

The Arizona plant, crucial to the U.S. semiconductor manufacturing efforts, started producing 4-nanometer wafers in April. With production yields now matching the efficiency of TSMC’s Taiwan operations, the plant is on track to meet its projected financial metric – a gross margin of 53 percent or higher.

The first fab is scheduled for full production in 2025, with two more fabs planned, including a second site using 2nm technology starting in 2028.

The investment in Arizona is not only a key component of TSMC’s U.S. strategy but also represents the largest foreign direct investment in Arizona and U.S. history. Alongside TSMC’s financial commitment, the U.S. government has provided substantial support, offering up to $6.6 billion in grants and $5 billion in loans to facilitate the project. The second and third fabs are expected to adopt advanced 2nm technology, helping maintain U.S. semiconductor competitiveness in the global market.

Despite these promising developments, the project has faced challenges, particularly in workforce management. TSMC encountered delays due to difficulties in hiring skilled workers and cultural differences between Taiwanese management and U.S. employees, causing the timeline for full production to slip.