Taiwan Semicondcutor Manufacturing Co. Ltd (TSMC) has increased its investment in U.S. advanced semiconductor manufacturing, the total of which now reaches $165 billion, according to TrendForce. Mass production is expected to begin after 2030 if the three newly planned fabs proceed on schedule. The US, which has been actively expanding its advanced semiconductor capacity, is projected to hold 22% of the global market share by 2030.

TrendForce notes that TSMC first announced plans for its Arizona fab in 2020 as part of a six-fab expansion strategy, aiming to mitigate geopolitical risks. However, escalating trade tensions and tariff issues have forced the company to accelerate its expansion timeline.

Since 2018, global trade conflicts and the COVID-19 pandemic have accelerated supply chain fragmentation, with governments worldwide striving to establish localized semiconductor production. TrendForce data from 2021 indicates that Taiwan accounted for 71% of global advanced node capacity and 53% of mature node capacity. However, by 2030, Taiwan’s advanced process share is expected to decline to 58%, while its mature process share will drop to 30% as the US and China ramp up their semiconductor manufacturing capabilities.

Expanding US investments is a strategic necessity as US-based clients represent the largest share of TSMC’s advanced node adoption. TSMC is also establishing two advanced packaging plants and a R&D center for HPC applications in addition to three new fabs. Arizona is set to become TSMC’s leading overseas technology hub, ensuring comprehensive service for key clients.

While expanding US production reduces concentration risks, it could also lead to higher costs for US IC customers. These increased expenses may trickle down to higher component and end-product prices, potentially affecting consumer purchasing behavior.

TrendForce observes that TSMC’s Arizona Phase 1 has just entered mass production, while Phase 2 and Phase 3 are still under construction, with mass production expected between 2026 and 2028. The actual timeline for the newly announced fabs remains uncertain, with no immediate impact on the industry in the short term. However, in the mid-to-long term, the cost implications and potential price increases across the supply chain will be key factors to watch.