Midway through TSMC's second-quarter earnings call in Taipei on July 16, chairman and CEO C.C. Wei announced an additional $100 billion for Arizona, lifting the company's total announced U.S. investment to $265 billion across 10 wafer fabs, two advanced packaging plants and a research and development center. The Phoenix campus now spans more than 1,100 acres. When it is all built, TSMC says roughly 30% of its global 2-nanometer-and-below capacity will sit in the Sonoran Desert.
'With a strong collaboration and support from our leading U.S. customers and U.S. federal, state, and city governments, we would like to announce an additional USD100 billion investment in Arizona,' Wei said, describing plans for 'several more semiconductor logic wafer fabrication plants for 2-nanometer and below technologies, as well as advanced packaging fabs, to support strong multi-year demand from our leading U.S. customers.'
The money follows a quarter that made it easy to spend. TSMC posted net income of NT$706.56 billion, about $22.4 billion, up 77.4% year over year and its fifth consecutive quarterly record. Revenue rose 36% to NT$1.27 trillion, gross margin hit 67.7%, and high-performance computing, the segment that contains AI accelerators, accounted for 66% of revenue. CFO Wendell Huang raised 2026 capital spending to between $60 billion and $64 billion, up from a prior $52 billion to $56 billion, with 70% to 80% earmarked for advanced process technologies.
What Arizona is actually running is more modest than the headline node suggests. Fab 21 Phase 1 has run N4, a 5nm-family process, in volume since late 2024, reportedly at roughly 92% yield, and turned a NT$16.14 billion profit in 2025, its first full year. Phase 2 completed construction in April 2026 and began tool installation in the third quarter, with 3nm volume production pulled forward to 2027 from 2028. The third fab, which broke ground in April 2025, targets 2nm and A16 and is not expected to reach production until the end of the decade. TSMC's 2nm ramp is real and steep, but it is happening at Fab 22 in Kaohsiung, where wafers now run above $30,000, nearly double the 4nm price. Arizona gets 2nm later.
The packaging timeline lags further still. TSMC broke ground on its first Arizona advanced packaging facility this spring. At the company's North America Technology Symposium in April, deputy co-chief operations officer Kevin Zhang put it plainly: 'We are aggressively expanding our own capability within the Arizona facility. We are going to build a CoWoS capability and 3D-IC capability there before 2029, so that is still our goal.' Before 2029 is an ambition, not a schedule, and Wei declined to offer one for the four new fabs either. 'We do have a plan,' he told analysts who pressed him, 'but the schedule most of the time depends on the market situation and our customers demand.'
Why It Matters
CoWoS, or chip on wafer on substrate, is why this story is about packaging rather than wafers. It is the 2.5D interposer technology that bonds a logic die to stacks of high-bandwidth memory at bandwidths no circuit board can approach. Every Nvidia H100, H200 and Blackwell part ships on it, as does every AMD Instinct MI300 and MI400. A finished 2nm die without CoWoS is not a shippable product; it is inventory. TSMC has roughly doubled CoWoS output annually since 2023, from about 35,000 wafers a month in late 2024 toward a projected 130,000 by the end of this year, and it remains oversubscribed. Nvidia alone is reported to hold more than 60% of 2025 and 2026 allocation.
That is the constraint onshoring has to clear, and in Arizona it does not clear this decade. Wafers started in Phoenix today still cross the Pacific to be packaged and come back. The nearer-term fix is not TSMC at all but Amkor, whose $7 billion campus in Peoria, about 20 miles from Fab 21, is scheduled to finish its first building in mid-2027 and begin production in early 2028, with 750,000 square feet of cleanroom, up to 3,000 jobs, and Apple as its first and largest customer. Until one of those lines runs, a genuinely domestic path from wafer start to packaged accelerator does not exist.
The geopolitics are doing real work underneath the capex. The January 15 U.S.-Taiwan trade agreement cut tariffs on Taiwanese goods to 15% from 20% in exchange for a minimum $250 billion in Taiwanese direct investment plus $250 billion in credit guarantees. Commerce Secretary Howard Lutnick claimed it: 'President Trump's leadership is driving companies to invest in American manufacturing.' TSMC executives, notably, kept attributing the expansion to AI demand rather than industrial policy. Both can be true: a demand-contingent pledge satisfies Washington without committing capital to a calendar. The CHIPS Act money, up to $6.6 billion in direct funding finalized in November 2024 plus roughly $5 billion in loans, covered only the first three fabs. Terms for the new tranche have not been disclosed.
What to Watch
Three markers. Whether Fab 21 Phase 2 holds its 2027 date for 3nm output after a third-quarter tool-in, which would be the second consecutive schedule TSMC has pulled forward in Arizona. Whether the Arizona CoWoS line compresses the same way, or whether before 2029 quietly becomes 2029. And labor: Taiwan's National Development Council head Yeh Chun-hsien flagged four constraints after a May site inspection, utilities and water, regulatory complexity, visa processing and labor shortages, while more than 1,000 Taiwanese engineers on three-year Arizona assignments approach the end of their contracts. Arizona Commerce Authority CEO Sandra Watson called the expansion 'a watershed moment for Arizona and America's semiconductor industry.' The Greater Phoenix Economic Council estimates 12,000 construction trades workers will be needed to build it. TSMC employs more than 3,500 in the state today. Asked how long the demand holds, Wei said he expects strength through 2029 or 2030, then added the caveat that should temper every number above: 'Whether there is a dip in between or not, I am not very sure.'
“We are aggressively expanding our own capability within the Arizona facility. We are going to build a CoWoS capability and 3D-IC capability there before 2029, so that's still our goal.”— Kevin Zhang, Deputy Co-COO and SVP, TSMC