By 2030, the US will produce one in every five advanced processors

TSMC this week announced plans to increase investment in advanced semiconductor manufacturing in the U.S. to $165 billion. If the company sticks to its schedule, mass production at its three factories will begin after 2030, by which time the U.S. share of the advanced semiconductor market will reach 22%, TrendForce analysts calculated.

Image source: tsmc.com

TSMC first announced plans to expand production in Arizona in 2020, a move aimed at mitigating geopolitical threats. But escalating trade tensions and tariffs have forced the company to accelerate the expansion. Global trade conflicts that began in 2018 and the ensuing pandemic have accelerated the fragmentation of supply chains, with governments around the world now seeking to establish local semiconductor production. In 2021, Taiwan accounted for 71% of the world’s advanced manufacturing capacity and 53% of mature technology production, according to TrendForce; by 2030, those figures will fall to 58% and 30%, respectively, thanks to the efforts of the United States and China.

Image source: trendforce.com

Growing investment in the U.S. is a strategic necessity for TSMC, as the largest share of its advanced manufacturing goes to American customers. The company plans to build not only its own manufacturing plants there, but also two packaging plants and a high-performance computing (HPC) R&D center. Arizona promises to become TSMC’s leading overseas technology center, providing one-stop service to its most important customers.

Expanding production in the US reduces the risk of TSMC over-concentrating its production in Taiwan, but the company’s customers face increased costs. The first-stage facilities in Arizona have already begun mass production; the second and third facilities are under construction and are set to begin operations between 2026 and 2028. The company has not yet made any statements about the launch dates of the last-tier factories. In the short term, these facilities will not have an impact on the industry, but in the medium and long term, they will not take long to appear in the form of rising prices across the entire supply chain.