TSMC Shares Surge as U.S. Plant Success Spurs Expansion and Major Orders

In recent weeks, Taiwan Semiconductor Manufacturing Company (TSMC) has been experiencing impressive momentum in the stock market, with its shares seeing significant rises. The American media have reported that TSMC's new plant in the United States has been achieving high production yields, prompting increased interest from American clients. As a result, the construction of TSMC's third factory in Arizona has commenced ahead of schedule, with subsequent capacity expansions already pre-booked by major customers.

TSMC Chairman and President Mark Liu previously stated in April that TSMC plans to enhance its $100 billion investment in the U.S., allocating approximately 30% of its production capacity for sub-2nm process nodes to its Arizona plant. This move is seen as a strategic effort to cater to key clients, including Apple, NVIDIA, AMD, Qualcomm, and Broadcom, whose demands continue to grow in line with advancements in semiconductor technology.

Reports indicate that Apple has placed substantial orders for TSMC's 2nm chips, which are predicted to significantly boost TSMC's revenues. The anticipated income for this year is expected to be between 800 billion and 1 trillion New Taiwan dollars, substantially higher than previous estimates. Apple has consistently utilized TSMC's manufacturing capabilities for its line of M series chips, which underscores the importance of TSMC's role in enabling the tech giant's ambitions.

The construction trajectory of TSMC's U.S. facilities reflects a growing inclination towards ensuring a geographically diverse production base. TSMC's inaugural 4nm factory in Arizona is already operational, with a second 3nm factory currently under construction and slated for completion by 2028. Once the third factory is operational, capable of producing chips with 2nm technology or more advanced processes, it is expected to commence production between 2029 and 2030.

Despite the positive trajectory, the expansion of TSMC's operations in the U.S. has not been without its challenges. The Arizona plants, though strategically vital, have experienced fiscal hurdles, reporting a significant projected loss for the upcoming year. Labor shortages, high operational costs, and the complexities of U.S. regulatory frameworks have posed additional challenges, illustrating the intricate nature of global semiconductor manufacturing endeavors.

As TSMC continues to navigate these operational and logistical challenges, industry analysts remain optimistic about its growth prospects. With increased production at its new factories and a robust order book from key technology players, TSMC's ability to meet the escalating demands of the semiconductor industry seems promising. This expansion aligns with broader geopolitical considerations, providing clients with the assurance of supply chain stability and technological excellence.