“Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” J.W. Kuo, Taiwan’s minister of economic affairs, said at a meeting of the Taipei Economic Committee in November 2024. “Although TSMC plans to make 2-nanometer chips [abroad] in the future, its core technology will stay in Taiwan,” Kuo added.
Kuo’s comments at the time reflected that TSMC couldn’t produce 2 nm integrated circuits in the U.S. or Europe until its A14 (1.4 nm) lithography was ready. After that, it would remain in Taiwan and could move 2 nm chip production to other countries. This restriction posed a problem for TSMC, as demand for its most advanced integrated circuits was very high due to the success of semiconductors for AI applications.
The U.S. Threatens TSMC With Up to 100% Tariffs if It Doesn’t Build Its Chip Fabs in Arizona
Chips Made by TSMC in the U.S. Will Reportedly Be 30% More Expensive
Finally, the Taiwanese government has moderated its protectionist strategy. Kuo spoke again in mid-January, stating that TSMC can produce 2 nm chips in its U.S. facilities. However, the government will carefully evaluate the use of this technology in the U.S. “Private businesses should make their own business decisions based on their own technological progress […] TSMC is building factories in the U.S. with the aim of serving its U.S. customers, as 60 percent of the world’s chip-designing companies are based in the U.S.” he said.
Four months later, large-scale 2 nm integrated circuit manufacturing is coming to TSMC’s Arizona facilities. AMD CEO Lisa Su and TSMC CEO C.C. Wei unveiled the first EPYC “Venice” chip produced on the company’s N2 node. This CPU was manufactured in Taiwan. However, both executives confirmed their commitment to increasing production at the fabs TSMC is building in Arizona.
The first of these factories is about to start producing chips on a large scale, but the plan doesn’t end there. The second plant will be operational in 2028 and produce integrated circuits at the N3 and N2 nodes. The third fab won’t be fully operational until the end of the decade, producing chips at the N2 node. At this point, and under pressure from the U.S. government’s tariff policy, it’s likely that 2 nm semiconductor production in Arizona will arrive well before 2028. This isn’t official information, but it’s a reasonable forecast under current circumstances.
There’s something else worth noting. According to TechInsights, TSMC spends less than 10% more to produce a 300 mm wafer at the new Arizona facility than it does at one of its Taiwan facilities. That labor is less than 2% of the total cost.
Still, according to financial journalist Walter Bloomberg, TSMC will increase the price of integrated circuits it produces in the U.S. by 30% to offset cost overruns caused by tariffs on chip production equipment imported from Europe and Japan. The Trump administration hasn’t revealed how the tariffs will affect imports of photolithography machines used by TSMC, Intel and Samsung factories in the U.S. It’s expected to do so within two months. Still, Bloomberg appears confident that a price increase is inevitable.
Image | TSMC
The post The U.S. Wins: TSMC Will Produce Its Best Chips in Arizona, Though They Will Reportedly Be 30% More Expensive appeared first on Xataka On.
