TSMC, the world’s largest contract chipmaker, is taking significant steps to develop its Fab 21 site near Phoenix, Arizona, into a standalone semiconductor manufacturing cluster. The company aims to produce 30% of its advanced N2 (2 nm-class) and A16 (1.6 nm-class) chips in the U.S., TSMC Chief Executive and Chairman C.C. Wei revealed during a recent earnings call. The strategic initiative will not only strengthen the semiconductor supply chain in the U.S. but also create significant economic opportunities.
TSMC’s Fab 21 facility will play a key role in advanced chip manufacturing. Currently, Fab 21 Module 1 is ramping up production of chips for American customers using the company’s N4 and N5 process technologies. In addition, Fab 21 Module 2, which can produce N3 (3 nm-class) chips, has made significant progress in construction. TSMC plans to start production two quarters ahead of schedule in 2028 by accelerating the installation of equipment at the facility.
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The company’s long-term vision is to transform Fab 21 into a GigaFab cluster with a capacity of 100,000 wafers per month. To achieve this goal, TSMC will build two additional modules—Module 3 and Module 4—at Fab 21, which will be dedicated to the production of N2 and A16 chips. Construction of these modules is expected to begin later this year, with at least one module expected to come online by 2029, subject to approvals.
TSMC’s expansion plan is designed to meet the demand of its leading customers in smartphones, artificial intelligence (AI), and high-performance computing (HPC) applications. “Our expansion plan will allow TSMC to scale into a GigaFab cluster, which will effectively meet the advanced needs of our customers,” said C.C. Wei. The initiative is expected to be a key step in boosting technological innovation and employment opportunities in Arizona.
However, the lion’s share of TSMC’s advanced chip production still takes place in Taiwan. The company is building at least three N2 and A16-capable fab modules in Taiwan’s Hsinchu and Kaohsiung Science Parks, with more modules to come. However, the production of 30% of advanced chips in the US is seen as a significant milestone, strengthening America’s role in semiconductor manufacturing.
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Future modules at Fab 21—Module 5 and Module 6—will use more advanced process technologies (possibly A14 or better) beyond A16. The construction and production schedule of these modules will depend on customer demand, but TSMC is working to procure the necessary equipment in a timely manner to effectively operate these facilities.
TSMC’s Arizona expansion is seen as a positive sign for the US semiconductor industry. Developing Fab 21 into an independent manufacturing cluster will not only strengthen the local supply chain ecosystem but also contribute to the creation of high-tech jobs and regional economic growth. The project is seen as an important step in increasing technological self-reliance in the US.
Overall, TSMC’s Fab 21 project is a strong move to strengthen America’s position in global semiconductor manufacturing. By accelerating production of N2 and A16 chips, expanding into a GigaFab cluster, TSMC is poised to meet future technology demands while contributing to economic and technological progress in the US.