TSMC plans to invest up to $250 billion in a technology park in Arizona, but faces several obstacles

TSMC — rethinking manufacturing strategy in the United States

1. From losses to profit
The project to build advanced chips in Arizona, initiated under pressure from U.S. authorities, initially caused TSMC to incur losses. However, today the state’s first facility is already profitable. This confirms the company’s belief in the project’s prospects and opens the way for further growth.

2. Planned investments
TSMC announced its readiness to invest up to $250 million in U.S. manufacturing development, with an officially stated amount of $165 million. If the plans are successfully executed, this figure could rise. Ideally, the company intends to build a technology park in Arizona comparable to the Taiwanese center in Xincun.

3. Current challenges
According to Taiwanese officials (citing TrendForce), the project faces the following issues:

Despite attempts to offset the outflow of Taiwanese talent, the problem cannot be fully resolved.

4. Production structure in Arizona
| Component | Status | Plan |
|-----------|--------|------|
| P2 | Equipment is already being assembled | Setting up 3‑nm production |
| P3 | Foundation is being built | — |
| P4 / AP1 | Regulatory approvals are ongoing | — |

Having a site adjacent to existing facilities allows significant expansion of local manufacturing.

5. Impact of the global market
* Contract manufacturing: The current confluence is favorable for TSMC.
* U.S. investments: American giants plan to spend up to $725 million on expanding computing capacity; a substantial portion of these funds will go to TSMC.
* Key customers:
* Nvidia – buy‑back commitments amounting to $95 million, almost six times higher than two years ago ($16 million).

6. Financial metrics
| Metric | Value |
|--------|-------|
| Capital expenditures (2024) | $56 million |
| Expected revenue growth (2026) | at least +30 % |
| Profitability (Q1 2024) | from 59 % to 66 % annually |

Launching 3‑nm chips in the U.S. and Japan will meet local demand and increase revenues, especially amid AI growth.

7. Competitive environment
* Samsung, Intel, Rapidus are already working on 2‑nm technologies.
* At present, the threat of reduced demand from these companies is not considered critical by TSMC leadership.

Conclusion:

TSMC has successfully turned its Arizona project from a loss into profit and now plans to scale production with investments up to $250 million. Despite infrastructure and workforce challenges, the company remains confident in revenue and profitability growth thanks to rising demand for 3‑nm chips and favorable conditions in the global contract manufacturing market.