With geopolitical pressures intensifying rapidly after Trump's inauguration as President of the US, TSMC announced on March 4, 2025, that it would invest an additional US$100 billion in the US. However, this new investment plan still tests the Trump administration's ability to address issues related to factory construction and talent shortages.
For the issue of advanced process mass production, DIGITIMES senior analyst Eric Chen expects that Taiwan will continue to be prioritized, with plans to replicate related operations to US facilities later.
During Trump's first term in 2018, he not only initiated the US-China trade war but also elevated the US-China technology conflict to the forefront. With semiconductors becoming a national security issue, he began advocating for semiconductor manufacturing within the US.
Since 2020, TSMC has gradually invested in building advanced process capacity in the US. However, during the construction phase, challenges such as labor shortages have impacted the related progress, delaying the TSMC Arizona plant's (Fab21 P1) official volume production, which was previously scheduled for the end of 2024.
Although Fab 21 P2 is still under construction, its timeline has also been delayed compared to initial schedules. Meanwhile, Fab 21 P3 is expected to be completed before 2030, with an estimated investment of US$65 billion across the three advanced fabs in the US.
TSMC, on March 4, 2025, further announced increased investments in the US and in addition to the originally planned three advanced process fabs, TSMC will add three more fabs, two advanced packaging plants, and one R&D center. Consequently, total investments in the US will rise to US$165 billion.
Chen noted that TSMC's announcement of increased investment in the US represents the largest single foreign direct investment (FDI) project in the country to date. The content of this investment is expected to meet Trump's demand for strengthening semiconductor manufacturing in the US, benefiting local economic development and job creation. This move reflects TSMC's strategic balance between investment needs and geopolitical requirements.
However, Chen believes that the progression of TSMC's investment plan in Arizona has highlighted numerous challenges faced during the construction period. This newly added investment plan will require 40,000 construction workers over the next four years, along with a rising demand for researchers and equipment engineers at the fab.
These factors are crucial for TSMC's successful implementation of its US investments and will test how the Trump administration can assist TSMC in expanding advanced processes and establishing advanced packaging technologies and production capabilities.
As TSMC expands its investments in the US, the allocation of resources towards the US will likely become unavoidable. Therefore, further tracking of arrangements in Taiwan and other overseas investments will be necessary. Nevertheless, Chen pointed out that TSMC has stated that the mass production of the most advanced processes requires close integration with R&D and Taiwan remains the global headquarters for TSMC's R&D; thus, the planning for prioritizing mass production of advanced processes in Taiwan should remain unchanged.
Eric Chen, DIGITIMES senior analyst
Article edited by Jack Wu
