[News] TSMC’s Arizona Fab Reportedly Meets Only 7% of U.S. Chip Demand for Now Despite Expansion Push

TSMC is accelerating its U.S. push, with its third Arizona fab (F21 P3) reportedly breaking ground in Q2. Still, the foundry giant is playing catch-up—Treasury Secretary Scott Bessent revealed TSMC’s Arizona site currently meets just 7% of U.S. chip demand, according to Wccftech via The The All-In Podcast.

Riding the “Made-in-U.S.” momentum, TSMC has locked in major clients like NVIDIA, AMD, and Tesla. AMD’s next-gen Venice processor is already slated for 2nm production at Fab 21, according to the company’s press release. In a fresh update, Elon Musk revealed on July 28 via X that TSMC will produce Tesla’s newly designed AI5 chip—initially in Taiwan, before ramping up in Arizona.

However, as per Wccftech, this may still fall short of meeting local demand, as Bessent cited overregulation and local inspectors as key obstacles slowing TSMC’s U.S. expansion. At the same time, while Musk confirmed outsourcing the AI5 chip to TSMC, he also revealed that Samsung’s new Texas fab—with cutting-edge 2nm tech—will be dedicated to producing Tesla’s next-gen AI6 chip, underscoring the intense demand and competition in the U.S. market.

As TSMC Chairman C.C. Wei confirmed at the earnings call, the construction of the second fab in Arizona, which uses the 3nm process, has already been completed, and the company is now working to accelerate the volume production schedule by several quarters to meet customer demand.

Meanwhile, the fourth fab will also feature the 2nm and A16 processes, while the fifth and sixth fabs are set to adopt even more advanced technologies, according to Wei.

TSMC Boosts Advanced Packaging Push in America

Notably, Commercial Times reports that alongside expanding its foundry’s advanced nodes, TSMC is fast-tracking its first advanced packaging plant in the U.S., with construction set to begin in 2026.

According to Commercial Times, TSMC’s AP1 plant will link to its P3 fab and become the first U.S. facility to use SoIC (System-on-Integrated-Chips) technology. The plant will focus on SoIC and CoW (Chip-on-Wafer) processes, while the final on-substrate (oS) step is expected to be outsourced to Amkor, the report explains.

The report highlights SoIC’s use in AMD’s MI350 and its expected role in future Apple M-series chips—signaling TSMC’s drive to meet rising and varied customer demands in the U.S.

Industry sources cited by Commercial Times expect AMD’s next-gen EPYC Venice processor to leverage TSMC’s 2nm process combined with SoIC packaging. Meanwhile, the report also notes that NVIDIA’s Rubin, slated for release next year, will also adopt TSMC’s SoIC technology to integrate two GPUs manufactured on N3P and one I/O Die on N5B.

Read more

• [News] TSMC Reportedly Delays Kumamoto 2nd Fab Launch to 2029 Amid U.S. Expansion Push
• [News] AMD CEO Says TSMC Arizona Chips Cost Up to 20% More Than Taiwan’s but Are Worth It

(Photo credit: TSMC)