Scott Bessent Warns TSMC's $40 Billion Arizona Fab May Only Meet 7% Of US Chip Demand — Blames Building Inspectors, Red Tape For Delays

Treasury Secretary Scott Bessent warned that Taiwan Semiconductor Manufacturing Co.’s (NYSE:TSM) massive Arizona fabrication facility may produce just 7% of America’s semiconductor needs, highlighting regulatory obstacles hampering domestic chip production.

What Happened: “TSMC wants to build a gigantic fab system in Arizona, and I think it might be able to produce up to 7% of the chips that the United States needs,” Bessent said during recent remarks on All In Podcast. “And they’re dealing with local building inspectors.”

Bessent criticized regulatory hurdles slowing construction of the $40 billion facility. “Evidently, these chip design plants are moving so quickly, you’re constantly calling an audible and you’ve got someone saying, ‘Well, you said the pipe was going to be there, not there. We’re shutting you down,'” he explained.

See Also: As Elon Musk, Mark Zuckerberg And Sam Altman Chase Nvidia AI Chips, Jensen Huang Says ‘Just Call Me’ — Here’s How Allocation Really Works

Why It Matters: TSMC, the world’s largest contract chipmaker and key supplier to NVIDIA Corp. (NASDAQ:NVDA) and Apple Inc. (NASDAQ:AAPL), is fast-tracking its Arizona expansion. The company plans to begin production at a second plant by 2027 and expects up to 30% of its advanced 2nm capacity to eventually come from Arizona facilities.

CFO Wendell Huang told Bloomberg the company plans cautious spending in 2025 with up to $42 billion in capital expenditures while monitoring macro and foreign exchange risks.

Bessent argued that environmental regulations have contributed to deindustrialization. “We have made the decision to deindustrialize through our environmental regulations,” he stated, adding that making it “easy to build things again” requires reducing regulatory barriers.

TSMC maintains strong upward momentum across short-, medium-, and long-term trends, according to Benzinga’s Edge Stock Rankings. While growth signals remain robust, the stock's value rating appears comparatively lower. More detailed performance metrics are available here.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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