TSMC's $265B US fab pledge is the outline of a concept of a plan

SYSTEMS

Beware of fab makers bearing press releases

Talk is cheap and TSMC’s plan to bolster its US expansion by another $100 billion is just that — talk.

Riding high on yet another quarter of AI-fueled sales, which topped $40 billion, Taiwanese foundry giant TSMC announced plans this week to increase its US fab footprint to 12 facilities, totaling $265 billion of investment.

But making good on that promise is easier said than done, and if history tells us anything, it’s that plans change. 

As you may recall, Intel invested $30 billion to build a pair of new fabs in Arizona, and also planned to spend €30 billion on a megafab in Magdeburg, Germany; $25 billion on a fab in Israel; and $20 billion on a manufacturing plant in Ohio.

So far, only one of the Arizona plants has materialized. The German facility has been cancelled, the Israel site delayed indefinitely, and the Ohio foundry expansion pushed until at least 2030.

All of that is to say, TSMC’s leaders can make any plan they like, but it doesn’t mean the cash the will actually be invested or the facilities built. And even if TSMC does pack the Arizona desert with the dozen wafer fabs and advanced packaging facilities it’s promised, it could be decades before we see them come online.

These are some of the most complex facilities in the world. The site selection, permitting, and support buildings required to supply power and water, and to condition the air for the clean rooms, takes years and billions of dollars to bring online before the first lithography machines from ASML can be deployed and tested.

To put things in perspective, since announcing its first leading-edge fab in the US during Trump’s last administration, TSMC has managed to build just two fab sites and break ground on a third, all at a cost of $65 billion.

The first of these came online in late 2024 with Apple and Nvidia announced as flagship customers early last year. The second fab, which is slated to produce chips based on the foundry giant’s 3 nm process tech, isn’t slated to come online until the second half of next year. 

Unsurprisingly, TSMC says its third Arizona fab, announced in spring 2024, won’t  begin volume production until at least “the end of the decade” according to its own docs. 

If you're experiencing some déjà vu, that's probably because TSMC just announced its last $100 billion investment in US manufacturing in March 2025. Standing alongside President Donald Trump and Commerce Secretary Howard Lutnick, TSMC boss CC Wei announced called for three new fabs, two new advanced packaging facilities, and an R&D center.

None of these facilities has been completed, and the timelines remain vague. TSMC only acquired the additional property, totaling 900 acres, to support this expansion earlier this year.

Despite that, now TSMC says it’s going to spend $100 billion on another four fab sites. When will these facilities come online? Well, that all depends on the market situation, Wei told investors on the company’s Q2 earnings call this week, according to a transcript. “If you ask me to give you a firm schedule, no, we don't have it today, but we do have a plan.”

Considering it takes four to five years to build and ramp production at a new fab site, that $200 billion in promises could take decades, assuming a global economic recession — triggered by a certain bubble bursting, perhaps — doesn’t  derail those plans.

To be clear, with profits topping $22 billion on revenues of more than $40.2 billion for the second quarter, TSMC could certainly afford to speed things up a bit.

But it’s not just a matter of throwing money at the problem. TSMC still needs workers to run the plant, and last we checked the talent pool was looking a little shallow. Each of these facilities requires thousands of specially trained workers. By the time TSMC’s third fab is completed, an analysis by McKinsey and SEMI project predicts the shortage of skilled chip workers to reach 157,000.

So, just like Intel’s grand plan to expand manufacturing across the US, Europe, and Middle East, TSMC’s latest US investment appears for the moment to be little more than an outline for a concept of a plan. ®