TSMC's US-made chips are more expensive than Taiwanese chips, but are already fully booked until late 2027
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Taiwanese semiconductor company TSMC has been building numerous factories outside Taiwan in recent years, including in Japan, the United States, and Germany. TSMC charges extra for chips manufactured outside Taiwan, but TSMC CEO Ceci Wei has said that its Arizona factory is booked up until the second half of 2027 due to growing demand.
TSMC's Arizona chip fab production is sold out through late 2027 | Tom's Hardware
https://www.tomshardware.com/tech-industry/semiconductors/tsmcs-arizona-chip-fab-production-is-sold-out-through-late-2027
Chipmaker TSMC's CEO says US investment driven by customer demand | Reuters
https://www.reuters.com/technology/chipmaker-tsmcs-ceo-hold-press-conference-taiwan-presidential-office-2025-03-06/
According to TSMC, the cost of manufacturing chips outside of Taiwan is increasing due to inflation and rising electricity prices. Therefore, TSMC plans to maintain its target gross profit margin of 53% by charging customers who want chips manufactured at TSMC factories outside Taiwan an additional fee. According to overseas media DigiTimes, chips manufactured at 4nm and 5nm class production nodes at TSMC's factory in Arizona are 20% to 30% more expensive than chips manufactured in Taiwan.
'We set our prices strategically to reflect the value of geographic flexibility, which allows us to manage the cost gap between overseas and domestic markets and minimise margin impairment,' Wei said.
However, despite these high prices, TSMC's American customers, including Apple, AMD, Broadcom, NVIDIA, and Qualcomm, have been pushing TSMC to further expand production in the U.S. In fact, TSMC has revealed that its Arizona factory is fully booked with pre-orders from these customers until the second half of 2027.
In response to high customer demand, TSMC announced on March 3, 2025 that it plans to invest at least $100 billion in additional semiconductor fabs over the next few years. The funds will be used to expand TSMC's Arizona fab, as well as build three new semiconductor fabs, two semiconductor packaging fabs, and a research and development center in the United States.
President Trump announces that TSMC will invest 15 trillion yen in US semiconductor factories - GIGAZINE
On the other hand, there are growing concerns in Taiwan that TSMC's overseas expansion will 'undermine national interests.' However, a Taiwanese government spokesperson has asked for understanding, saying, 'We will not completely transfer cutting-edge technology to the United States, and we will maintain cutting-edge technology domestically.' Wei also said, 'This investment plan will not affect the expansion of Taiwan's semiconductor industry,' and 'We will build 11 new production lines in Taiwan by 2025.'
Regarding TSMC's $100 billion investment in the United States, the Taiwanese government stated that it would 'keep cutting-edge technology in Taiwan,' and pointed out that 'Taiwan without advanced semiconductor technology is like Ukraine without nuclear weapons' - GIGAZINE
Tom's Hardware, an overseas media outlet, speculates that 'the factory that TSMC will build in Taiwan in 2025 will become a major base for semiconductor manufacturing for the 1.6nm and 2nm class production nodes.'
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