April 23, 2026 /SemiMedia/ — Taiwan Semiconductor Manufacturing Co (TSMC) plans to build an advanced chip packaging facility in Arizona, with a target to bring capacity online before 2029, as it looks to support growing demand from AI applications

The move highlights a key constraint in the semiconductor supply chain. Modern AI chips, including those used by Nvidia, often rely on advanced packaging to connect multiple dies into a single system. Technologies such as CoWoS and 3D IC have become critical, but capacity remains tight.

TSMC said earlier this year it was seeking permits for its first advanced packaging plant at its Arizona site. A company executive said this week that construction has already started, with a focus on adding CoWoS and 3D IC capabilities.

At present, chips produced at TSMC’s Arizona fabs for customers like Apple and Nvidia are still largely sent back to Taiwan for packaging. Building local packaging capacity would help reduce turnaround time and improve supply chain efficiency in the United States.

Meanwhile, outsourced semiconductor assembly and test provider Amkor is also working on a packaging facility in Arizona. The company has said it aims to complete construction by mid-2027 and start production in early 2028, ahead of TSMC’s timeline.

TSMC said it continues to work with Amkor to explore how its packaging services could support customers seeking more local production. While details are still being worked out, the company said it is looking at different ways to expand its manufacturing footprint.