The US site, which began producing N4 chips earlier in 2024, is rapidly filling with orders from top-tier customers like Nvidia, Apple, AMD, Broadcom, and Qualcomm.
The Arizona fab is already near full capacity, handling around 15,000 wafers per month. That figure is expected to climb to 24,000 at peak output, based on analysis from Cloud Express’s Nobunaga Chai. With demand booming, the plant’s output is reportedly dominated by Apple, which remains TSMC’s largest US-based client. Nvidia’s AI chips are currently undergoing process validation and are expected to hit the production line later this year.
Nvidia chief executive Jensen Huang said, “Adding American manufacturing helps us better meet the incredible and growing demand for AI chips and supercomputers, strengthens our supply chain and boosts our resiliency.”
Huang’s comments reflect the growing urgency from US-based tech giants to localise semiconductor production amid geopolitical risk and supply chain strain.
TSMC’s chief executive C.C. Wei added, “AI is reshaping our daily lives and semiconductor technology is the foundation for new capabilities and applications. With the success of our first fab in Arizona, along with needed government support and strong customer partnerships, we intend to expand our US semiconductor manufacturing investment by an additional $100 billion, bringing our total planned investment to $165 billion.”
The move to localise AI chip production marks a significant shift in the US semiconductor landscape, though not without cost. Industry insiders suggest the price per chip could increase by as much as 30 per cent, driven by higher production costs in the US and the intense demand pressing up against the site’s physical limits.
Meanwhile, TSMC’s 2-nanometre process appears to be maturing faster than expected. Reports from the Taiwanese press indicate yields above 90 per cent for memory products. That figure, unusually high for a node this advanced, means less waste and stronger margins.
Tape-out activity, the final design stage before chips go to manufacturing, has surged fourfold for the 2nm node compared to the 5nm era. Supporting firms in the chip production supply chain, such as Kinik and Phoenix Silicon International, are seeing the impact. Kinik, which dominates diamond disc supply for TSMC’s 3nm process, has boosted monthly output to 50,000 units. These discs are crucial to CMP, a process that polishes silicon wafers to prepare them for photolithography and removes excess material after etching.
Rising demand for these tools suggests both 2nm and 3nm production are scaling rapidly, with analysts watching CMP tool makers closely as a proxy for TSMC’s advanced node output. With yield rates up and orders piling in, TSMC looks set to maintain its dominance even as production spreads to new territory.
