TSMC Ramps Up “Gigafab” Cluster in Arizona

Taiwan’s semiconductor powerhouse TSMC is fast‑tracking construction of its second and third fabrication plants in Arizona, aiming to establish a large‑scale “gigafab” cluster. Part of a broader $165 billion U.S. investment package, the move reflects TSMC’s bid to scale advanced chip production and secure supply chains for AI, high‑performance computing, and smartphones.

TSMC’s Phoenix campus—already home to the first U.S. fab—will now accelerate the timeline for its next two facilities by several quarters. The company previously pledged that by full build‑out, 30 percent of its most advanced chips will come from Arizona. CEO C.C. Wei emphasised that the move responds directly to surging domestic demand and supports broader U.S. efforts to onshore semiconductor production under the CHIPS Act.

Record Profits Fuel Expansion—and Hedge Against Risks

TSMC’s push in Arizona follows an outstanding Q2 2025 performance: net profit soared 61% year‑on‑year to around NT$398 billion (US $13.5 billion), with revenue up nearly 39%. Driven by robust AI and HPC demand, the company raised its full‑year revenue outlook to 30% growth, even as margins face pressure from U.S. expansion costs and currency fluctuations.

Despite tariff uncertainties and a 12% appreciation of the New Taiwan dollar, TSMC has stated that U.S. growth remains resilient. The firm is accelerating its second Arizona fab’s commercial launch—planning for 3 nm production—to come online “a couple of quarters” ahead of schedule.

This investment surge not only addresses escalating demand but also diversifies geopolitical risk, especially amid U.S.–China tensions over chip supply chains. TSMC’s strategy reflects both market opportunity and strategic resilience.

TSMC’s Arizona acceleration marks a pivotal shift in global semiconductor manufacturing. Bolstered by record earnings and strong U.S. policy backing, the company is positioning its Phoenix “gigafab” as a cornerstone of national tech infrastructure—both a defensive buffer and an offensive leap toward tech leadership.