TSMC Arizona Expansion Plan Increases to $465 Billion

TSMC is reportedly preparing a major new phase of its US build-out that would take its total Arizona spend from $165 bn to $465 bn, as part of a proposed US–Taiwan trade deal that would cut tariffs on Taiwanese exports to 15%. A Reuters report, citing the New York Times, says the package is still being finalised, while a separate Reuters update says Taiwan has reached a “broad consensus” with the US on tariff talks and is working towards a concluding meeting.

Under the reported plan, TSMC would add at least five more manufacturing facilities in Arizona on top of the projects already announced. That would bring the overall roadmap to around 11 fabs, alongside two advanced packaging plants and a local R&D centre. Neither the US side nor TSMC has publicly confirmed the $465 bn figure or the precise mix of process technologies for any additional fabs beyond those already disclosed.

What TSMC has already committed to in Arizona

TSMC’s currently stated Arizona programme totals $165 bn and includes multiple fabs plus advanced packaging and an R&D “team centre”, per the company’s March 2025 announcement of an extra $100 bn in US capex on top of its earlier $65 bn commitment. TSMC set out that plan in its March 2025 press release, and we previously covered that expansion when TSMC and President Donald Trump announced the additional $100 bn.

On its Arizona project page, TSMC says the first fab entered high-volume production on its N4 process technology in Q4 2024, while the second fab’s structure was completed in 2025 with volume production on N3 targeted for 2028. TSMC also says it broke ground on a third fab in April 2025, slated for N2 and A16 process technologies, with volume production targeted by the end of the decade (TSMC Arizona milestones).

Land, packaging and the practicalities of scaling to 11 fabs

Even without any new trade-linked commitment, TSMC has been positioning for more physical expansion. Local reporting says TSMC paid about $197 m at an Arizona State Land Department auction for roughly 900 acres (about 364 ha) of land next to its existing site, near Loop 303 and Interstate 17 in north Phoenix (KJZZ; Data Center Dynamics).

If the “11 fabs plus packaging and R&D” scenario materialises, the operational bottlenecks will likely be less about real estate and more about people, tools and infrastructure. Tool delivery lead-times (especially for EUV) remain long, and advanced packaging capacity has become strategically important as AI accelerators push the limits of chiplets, interposers and high-bandwidth memory integration. A larger in-state packaging footprint could reduce logistics friction for US customers, but it also concentrates demand for specialist skills and power/water provisioning in the Phoenix area.

Why a tariff-linked deal matters

What makes the reported package notable is the linkage between industrial investment and tariff policy. Taiwan is a major exporter of electronics and components to the US, and any shift to a 15% tariff rate would have broader implications beyond semiconductors (which have often been treated differently under various tariff regimes). That said, the politics and the economics are intertwined: expanding leading-edge capacity on US soil supports supply-chain resilience goals, while Taiwan’s government also has to consider how far it can “dual-source” advanced production without eroding the strategic value of its domestic manufacturing base.

For TSMC, the near-term watchpoint is not a theoretical $465 bn end-state but the next set of concrete milestones: permitting, build schedules, tooling plans, and customer allocations. The company’s next quarterly update (due 15 January) is likely to be parsed for any signal on whether these reports are crystallising into a firm capex plan.