TSMC announced on May 15, 2020 that it intended to build a semiconductor factory in Arizona, with construction planned for 2021 and production targeted for 2024. The company put total project spending, including capital expenditure, at approximately US$12 billion from 2021 to 2029. For chip customers considering a future U.S. manufacturing option, the announcement offered a timetable and capacity target, rather than supply available to order immediately. [S1]

The planned Arizona factory would use TSMC’s 5-nanometer process and have capacity for 20,000 semiconductor wafers per month, according to the company. That is a wafer-capacity figure, not a promise to deliver 20,000 finished chips or an allocation to any particular customer. The announcement did not specify customer volumes. A purchasing plan would still need to establish what share of the proposed capacity a buyer could actually obtain, and when. [S1]

TSMC’s earlier quarterly results show why the unit matters. In its April 16 report for the quarter ended March 31, 2020, the company said 7-nanometer shipments accounted for 35% of total wafer revenue. It classified 16-nanometer and more advanced technologies together as 55% of wafer revenue. Those percentages describe the company’s sales mix for that quarter. They do not measure wafers produced, global chip supply or the future Arizona factory’s share of either. Comparing them directly with a monthly wafer-capacity target would mix revenue with physical capacity. [S2][S1]

The spending figure has a different boundary again. TSMC’s approximately US$12 billion estimate covered the Arizona project from 2021 through 2029 and included capital expenditure; it was not presented as a single year’s capital budget. Nor did the announcement allocate that total across individual years. The company described support from the U.S. federal government and Arizona, while saying that investment policies would be crucial to the project’s success. It did not attach a subsidy amount to that support in the announcement. [S1]

Arizona would also extend an existing U.S. manufacturing presence. TSMC said it already operated a factory in Camas, Washington, and described Arizona as its prospective second U.S. manufacturing site. For a customer assessing the new option, the useful follow-up evidence would be progress toward the stated production date and a specific capacity agreement. The May plan and the March-quarter revenue figures serve different purposes: one describes a proposed factory, while the other records the business already being done. Neither establishes a customer’s future delivery schedule or purchase price. [S1][S2]

Source documents

  1. TSMC Announces Intention to Build and Operate an Advanced Semiconductor Fab in the United Stateshttps://pr.tsmc.com/english/news/2033
  2. TSMC Reports First Quarter EPS of NT$4.51https://pr.tsmc.com/english/news/2030