March 6, 2025 /SemiMedia/ — TrendForce's latest report indicates that TSMC has announced an expansion of its advanced semiconductor manufacturing investment in the U.S., totaling $165 billion. If the newly planned three fabs proceed as scheduled, volume production will begin post-2030, with U.S. capacity accounting for 6% of TSMC's total output by 2035. However, Taiwan's share will remain above 80%.

Since announcing its first advanced fab in Arizona in 2020, TSMC has planned six fabs in the region to mitigate geopolitical risks. However, escalating trade policies and global tensions have accelerated its expansion timeline.

TrendForce data shows that in 2021, Taiwan dominated global foundry capacity, with 71% of advanced nodes and 53% of mature nodes. However, with overseas expansions, Taiwan's advanced node capacity share is expected to drop to 58% by 2030, while mature nodes fall to 30%. Meanwhile, both the U.S. and China are aggressively increasing their presence in the semiconductor market.

Given that U.S. customers account for the largest share of TSMC’s advanced node demand, expanding U.S. operations is a strategic necessity. In addition to three new fabs, the investment includes two advanced packaging plants and an R&D center, positioning Arizona as TSMC’s key overseas technology hub.

Despite the scale of TSMC’s U.S. expansion, concerns over technology transfer persist. However, TSMC’s capacity plans indicate that Arizona’s P1-P3 fabs will have significantly lower output than Taiwan’s facilities, reinforcing Taiwan’s status as the primary manufacturing base. While diversifying production can mitigate overconcentration risks, higher costs may be passed on to U.S. IC customers, potentially increasing component and end-product prices, which could impact consumer demand.

Currently, TSMC's first Arizona fab has begun production, while P2 and P3 remain under construction, with volume production expected between 2026 and 2028. The execution timeline for newly announced fabs remains uncertain. In the short term, the impact on the industry is minimal, but long-term cost pressures and potential supply chain shifts warrant close attention.