Taiwan Semiconductor Unveils $20 Billion Arizona Chip Fab, Apple Named Key Customer

On Friday, Taiwan Semiconductor Manufacturing Co (NYSE:TSM) unveiled its first advanced chip fabrication plant in Arizona, marking a significant milestone in U.S.-based semiconductor production.

The facility, covering 3.5 million square feet on a 1,100-acre site, represents Taiwan Semiconductor’s commitment to bolstering domestic chip manufacturing. Apple Inc (NASDAQ:AAPL) is its largest customer.

Initially projected at $12 billion, the project has grown to $20 billion, and production has been delayed to 2025. Taiwan Semiconductor stock is trading upwards on Monday.

Also Read: Apple’s 2025 Chip Transition Targets New Wireless Edge, Broadcom To Retain Key Role

Currently in pilot production, the fab manufactures sample wafers for customer verification, CNBC reports.

Taiwan Semiconductor plans to build two additional fabs on the site by the end of the decade, bringing the total investment to $65 billion.

Rick Cassidy, chairman of Taiwan Semiconductor, highlighted to CNBC the challenges of navigating U.S. regulations, labor laws, and construction processes but expressed confidence that the project is nearly back on its original schedule.

Once operational, the Arizona plant will produce 4-nanometer chips at a rate of 20,000 wafers per month.

The Arizona fab is part of a broader strategy to diversify chip production outside Taiwan, ensuring supply chain resilience amid geopolitical tensions and natural disasters.

Nvidia Corp (NASDAQ:NVDA) is weighing the production of the front-end process of Blackwell AI chips at Taiwan Semiconductor’s Arizona plant.

Currently, 92% of the world’s most advanced chips are made in Taiwan, prompting Taiwan Semiconductor to ship the aforementioned Blackwell chips back to Taiwan for packaging.

The company aims to employ 6,000 workers for its three planned fabs in Arizona. Taiwan Semiconductor has also implemented water recycling initiatives to manage the 4.7 million gallons required daily for operations, reducing consumption to 1 million through sustainable practices.

Running the first Arizona fab requires significant power—2.85 gigawatt-hours per day, equivalent to the usage of 100,000 homes.

Taiwan Semiconductor is offsetting this demand by purchasing renewable energy credits and utilizing on-site solar energy.

International Data Corp expects Taiwan Semiconductor to control a 67% share of the global foundry market in 2025, backed by AI applications and crypto-mining technologies.

Taiwan Semiconductor posted third-quarter revenue of $23.50 billion, up 39%, surpassing guidance and estimates, driven by strong demand for 3nm and 5nm technologies. Needham analyst Charles Shi highlighted Apple’s significant contribution to the robust 3nm performance.

Price Action: TSM stock is up 1.67% at $204.29 premarket at last check Monday.

Also Read:

• Taiwan Semiconductor CEO Highlights AI-Powered Drones, Next-Gen Robots As Growth Drivers

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