TSMC breaks ground on third Arizona fab; Commerce Secretary visits Phoenix site

By Amy Edelen 

Taiwan Semiconductor Manufacturing Co. broke ground Tuesday on the third factory at its north Phoenix campus, coinciding with a visit from U.S. Secretary of Commerce Howard Lutnick.

TSMC initially planned to break ground on its third fab — which will utilize 2-nanometer and A16 process technologies — later this year, but the company had been in discussions with the U.S. government to help speed up the permit approval process, TSMC CEO C.C. Wei said on an April 17 earnings call.

TSMC obtained approval for an air permit, paving the way to begin construction of its third fab, a company spokesperson told the Business Journal.

In addition, TSMC gained approval earlier this month for reviews related to water, sewer and grading plans for its third fab site, according to city of Phoenix records.

“As part of our commitment to support the needs of America's leading innovators in smartphones, HPC and AI, we recently broke ground on our third fab, which will introduce more advanced semiconductor capacity to the U.S.,” Wei said in a statement Tuesday. “We are grateful for the secretary’s commitment to supporting the advanced semiconductor manufacturing ecosystem."

In a CNBC interview filmed at TSMC's Arizona fab site, Lutnick stated that onshoring semiconductor production is imperative for national security. He also touted the Trump Administration’s approach to bringing advanced manufacturing to the U.S.

“So a company commits to building in America, but it takes too long to get permits, to get regulations, to get everything done,” he said. “We're going to move it forward, and what you saw today is [TSMC] needed a couple of permits. We got those permits super fast, and here we go. They're building it.”

Customer demand fuels TSMC's fab construction

The news comes as TSMC recently completed construction of its second fab ahead of schedule to meet AI-related chip demand from customers, including Apple, Nvidia, AMD, Qualcomm and Broadcom.

Apple in February said it will double the size of its U.S. Advanced Manufacturing Fund from $5 billion to $10 billion, which "includes a multibillion-dollar commitment from Apple to produce advanced silicon in TSMC's Fab 21 facility in Arizona.”

Meanwhile, AMD will soon manufacture processor chips at one of the new Arizona-based TSMC facilities, marking the first time that the chips will be manufactured in the U.S.

Nvidia also announced that it has already started production of its Blackwell chips at TSMC’s Arizona plants. It plans to produce up to half a trillion dollars of AI infrastructure in the U.S. over the next four years through partners, including TSMC.

Wei said on an April 17 earnings call the company is “working on speeding up the volume production schedule” for its second fab, which will utilize 3-nanometer process technologies.

Wei did not disclose when production would be underway at TSMC’s second fab. TSMC previously planned to begin production at its second fab in 2028.

A TSMC spokesperson told the Business Journal that the chipmaker is projects its third fab to be in operation by the end of the decade.

Construction and production schedules for the company’s future fabs in north Phoenix will be based on customer demand, Wei said on the company’s earnings call.

Wei in March announced the company intends to invest as much as $100 billion to build three more computer chip factories, two advanced packaging centers and a research and development center that will create thousands of jobs in Arizona.

TSMC’s recent investment is in addition to $65 billion the company already pledged toward building out of its north Phoenix fab site, marking the largest largest single foreign direct investment in U.S. history.

Final Thoughts

TSMC’s rapid expansion in north Phoenix reinforces Arizona’s pivotal role in the future of U.S. semiconductor manufacturing. With accelerated permitting, cutting-edge 2nm and 3nm chip production, and backing from major tech giants like Apple and Nvidia, TSMC’s presence is not only reshaping the region’s economy but redefining the national technology landscape.