The Resurgence of US Chip Manufacturing: Reality or Hype?
23 April 2025 · Uncategorized ·
In 2025, TSMC’s American factory is slated to begin mass production—a significant milestone that introduces advanced chip manufacturing technology to the United States and will test whether the CHIPS Act of 2022 can effectively stabilize semiconductor supply chains for the U.S. and its allies. However, it remains uncertain if this expansion by TSMC, along with the broader vision of self-sufficient semiconductor manufacturing in the U.S., will overcome technological bottlenecks to fundamentally reshape the global landscape.
In May 2020, TSMC announced a historic plan to invest $12 billion in an advanced semiconductor factory in Phoenix, Arizona. This investment was subsequently increased to $40 billion by December 2022 and included plans for another facility nearby. In April 2024, the U.S. Department of Commerce and TSMC’s Arizona company announced that up to $6.6 billion would be provided under the CHIPS Act to support advanced chip manufacturing in America.
TSMC also has a third factory planned, which will bring its total investment over $165 billion by March 2025. This is accompanied by an additional expansion plan encompassing three new factories and two advanced packaging facilities, as well as a large research team center. The first facility began mass production using N4 technology in Q4 of 2024.
Despite initial concerns regarding costs, capacity ramp-up, and technological leakage when TSMC initially announced its Arizona factory plans, current progress indicates that this expansion is part of a long-term strategic consideration: successfully entering the U.S. high-end manufacturing market while building a three-pronged strategy shield based on customer trust, geopolitical synergy, and policy support.
Apple, AMD, and NVIDIA are among those who have committed to producing their cutting-edge products at these Arizona facilities as they accelerate supply chain restructuring centered around “local production” with strategic geographic adjustments. Apple has already entered the final validation phase for chips manufactured by TSMC’s U.S. factory, while AMD is preparing to begin manufacturing its fifth-generation EPYC server CPUs there.
Intel, under CEO Sanjay Mehrotra's leadership, aims to become a system integrator in global foundry services with an emphasis on trust and performance delivery through continuous process transparency and customer collaboration. The company plans significant investments over the next four years as part of this strategy to build AI infrastructure worth $50 billion.
However, replicating TSMC’s model faces structural obstacles due to higher costs, differences in manufacturing culture, and supply chain integrity issues within America compared with Taiwan's established ecosystem. Despite these challenges, “Made-in-Arizona” chips are forming a strategic layout driven by geopolitical security rather than purely economic efficiency.
In May 2020, TSMC announced a historic plan to invest $12 billion in an advanced semiconductor factory in Phoenix, Arizona. This investment was subsequently increased to $40 billion by December 2022 and included plans for another facility nearby. In April 2024, the U.S. Department of Commerce and TSMC’s Arizona company announced that up to $6.6 billion would be provided under the CHIPS Act to support advanced chip manufacturing in America.
TSMC also has a third factory planned, which will bring its total investment over $165 billion by March 2025. This is accompanied by an additional expansion plan encompassing three new factories and two advanced packaging facilities, as well as a large research team center. The first facility began mass production using N4 technology in Q4 of 2024.
Despite initial concerns regarding costs, capacity ramp-up, and technological leakage when TSMC initially announced its Arizona factory plans, current progress indicates that this expansion is part of a long-term strategic consideration: successfully entering the U.S. high-end manufacturing market while building a three-pronged strategy shield based on customer trust, geopolitical synergy, and policy support.
Apple, AMD, and NVIDIA are among those who have committed to producing their cutting-edge products at these Arizona facilities as they accelerate supply chain restructuring centered around “local production” with strategic geographic adjustments. Apple has already entered the final validation phase for chips manufactured by TSMC’s U.S. factory, while AMD is preparing to begin manufacturing its fifth-generation EPYC server CPUs there.
Intel, under CEO Sanjay Mehrotra's leadership, aims to become a system integrator in global foundry services with an emphasis on trust and performance delivery through continuous process transparency and customer collaboration. The company plans significant investments over the next four years as part of this strategy to build AI infrastructure worth $50 billion.
However, replicating TSMC’s model faces structural obstacles due to higher costs, differences in manufacturing culture, and supply chain integrity issues within America compared with Taiwan's established ecosystem. Despite these challenges, “Made-in-Arizona” chips are forming a strategic layout driven by geopolitical security rather than purely economic efficiency.