TSMC is the big name in the global semiconductor industry. We all have companies like NVIDIA, Qualcomm, Intel or AMD in mind, but It is TSMC that produces most of the chips of these companies. The Taiwanese company produces around 60% of the world’s chips, but when we talk about the most advanced chips, that dominance is practically total. It is a technological candy that has decided to expand and, after the plant in the United States, continues to buy land to expand its footprint.
And it is a move that further unbalances the balance in terms of chips.
Necessary expansion. TSMC’s base of operations is in Taiwan, but a few years ago, the company saw clearly that they had to expand their operations framework. It is something that responds to a double need. On the one hand, the more footprint they have in other countries, the more the technology industry will continue to depend on their technique. On the other hand, the main factor: the threat of china.
China and Taiwan are going through a period of growing tension. We have seen maneuvers by China that I’m sure they’ve made the Taiwanese nervous.. Also Taiwan operations for show that they could defend themselves and countries like Japan and, above all, the United States They are very aware of the situation. 87% of TSMC’s more than 80,000 employees operate in Taiwan and any open conflict between the countries would mean a stoppage in the company’s operations. Little joke with this: if its chips move the world, let TSMC stop producing would cause an economic collapse.
Arizona. There is a third factor that is encouraging this international expansion. Although Europe, the United States and China seeks national sovereignty in semiconductor matterthe reality is that companies need the cutting-edge chips that only TSMC can reliably mass produce. And, while financing semiconductor plants, countries have decided to invest millions to attract TSMC to their territories.
The plant that will open in Germany either that of Japan They are two examples, but the one that is already operating is the American one. Although Trump, with his protectionist policies and ‘America First’, does not like it being a foreign company that cuts the cod, TSMC already has a huge plant located in Arizona from which it produces key components of the iPhone 16.
This facility is the company’s most ambitious project far from Taiwan, and what started as a $12 billion investment in 2020 has become a colossal $160 billion-plus operation. They started to produce 4 nanometer chips at the beginning of 2025 and the idea is refine machinery to reach 2nm in 2029.
New lands. Within the ‘Made in the USA’ strategy of the large American technology companies, TSMC Arizona is vital. And considering the economic opportunity that the AI era has opened up, with the astronomical need for chips to create products like NVIDIA’s solutions for data centers, TSMC wants to grab as much of the pie as possible. As we read in The Wall Street Journala series of factors such as Taiwanese investment and a relaxation in US tariffs on Taiwan would allow TSMC to expand further.
According to the media, last week the technology company purchased 900 acres – about 360 hectares – of land adjacent to its current property in Arizona. The total has been almost 200 million dollars and the intention is to expand the facilities to reach a dozen.
TSMC + NVIDIA
Made in the USA (more expensive). With this move, TSMC would discourage the competition from trying to invest to stand up to them because, as we say, they are the ones who dominate the production of advanced chips and who have the capacity to supply their enormous customer base. Apple is one of those that already buys chips from Arizonabut NVIDIA has confirmed that its B30 GPUs will be the first made in the United States.
Now, there is a toll. HE esteem TSMC Arizona prices on advanced nodes are between 5% and 30%. There are several factors. In Taiwan they have the policy of “everything at one hour”, so any material the factory needs is very close, creating an extremely efficient chain. That does not happen in the American factory, where suppliers are far away and you have to resort to air transportation, which increases the price. There is also the fact that the wages They are higher in the US than in Taiwan.
Headache. Despite these conditions, and being a foreign company controlling the show on home soil, TSMC has so dominated the process that the companies it’s worth it because they know that the chips they get will be the best for their products. Furthermore, from a political perspective, these additional costs may even be reasonable if they ensure that a conflict in Taiwan would not completely paralyze its economy.
For TSMC, expansion is a great move. At the political level, countries that embrace their factories also have a reason to attract investment and Big Tech and the CEO of NVIDIA himself is clear that swith those who will lead the industry for decades. However, it is still an industry dependent on a single entity. Without leaving the United States, the country got his hands on Intel in the middle of last year in an almost unprecedented move to turn the company into the great american foundry.
With TSMC expanding its network at home, they are going to have it complicated despite having the best technology available.
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