On Wednesday, April 30, TSMC officially broke ground on its third semiconductor fabrication plant—Fab 21 Phase 3—near Phoenix, Arizona. The new facility will produce chips using the company's 2nm-class N2 and N2P technologies, as well as its next-generation A16 (1.6nm) process nodes, with production expected between 2028 and 2030.

The groundbreaking ceremony marked a milestone in TSMC's $165 billion investment plan for its U.S. operations. The company's Arizona site will eventually include six wafer fabs, two advanced packaging facilities, and one R&D center. Fab 21 Phase 3 is the final project in the initial $65 billion investment phase, while a second phase—worth $100 billion—will fund three more fabs.

The ceremony coincided with the 100th day of the Trump administration, during which U.S. Secretary of Commerce Howard Lutnick visited the site. In a statement, Lutnick emphasized TSMC's strategic importance, calling it “the return of American manufacturing.” He added, “President Trump's bold leadership and clear direction are driving record-speed reshoring of companies and jobs.”

TSMC Chairman and CEO C.C. Wei called the Arizona fabs “the largest single foreign direct investment in U.S. history,” noting the third fab reinforces the company's commitment to serving high-performance computing and AI customers in the U.S. Wei added that 2nm will be the anchor node for the Arizona site, eventually contributing around 30% of the company's 2nm and below capacity.

Executives from key TSMC clients—including Apple CEO Tim Cook, NVIDIA CEO Jensen Huang, and AMD Chair and CEO Lisa Su—also expressed support in the official announcement. Cook said he was “proud to foster more U.S. high-skill jobs,” while Huang praised the return of AI infrastructure manufacturing to the U.S. Su noted TSMC's close collaboration has enabled AMD to consistently push the boundaries of high-performance computing.

However, TSMC's Arizona expansion comes amid growing political pressure in Taiwan. Just last week, Taiwan's legislature passed a law requiring government approval for the export of cutting-edge chip technologies. While Fab 21 is expected to use 2nm-class nodes, TSMC cannot legally transfer newer technologies such as A14 (1.4nm) to overseas fabs until those processes are first deployed in Taiwan.

Bloomberg reported that U.S. officials may condition CHIPS Act funding on deeper U.S. commitments, though current law requires the government to allocate subsidies through 2026 to companies like TSMC, Intel, Samsung, and GlobalFoundries.

Despite Fab 21 Phase 1 reaching volume production, financial disclosures show continued operating losses at TSMC Arizona. The subsidiary's net loss widened from NT$10.9 billion in 2023 to NT$14.3 billion (approx. US$460 million) in 2024, partly due to the time lag between production ramp-up and revenue recognition.