Taiwan Semiconductor Manufacturing Company (TSMC), a pivotal partner in Apple’s chip production, has been expanding its manufacturing footprint in the United States. Despite substantial investments, TSMC’s U.S. facilities are projected to lag approximately five years behind their Taiwanese counterparts in producing the most advanced semiconductor technologies.
Investment and Expansion in the U.S.
TSMC has committed billions of dollars to establish and enhance its presence in the United States. The company’s first Arizona-based chip fabrication plant (fab) is operational, with a second facility slated to commence operations by 2028. Plans are also underway for a third plant, intended to produce 2-nanometer chips, with production expected to begin before the end of the decade.
Technological Lag Between U.S. and Taiwan Facilities
The timeline for these U.S. facilities indicates a significant delay compared to TSMC’s operations in Taiwan. For instance, while the second Arizona plant aims to produce 3-nanometer chips by 2028, TSMC’s Taiwanese fabs are already advancing beyond this technology. This disparity suggests that TSMC’s U.S. operations will remain approximately five years behind in adopting cutting-edge semiconductor manufacturing processes.
Implications for Apple’s Product Timeline
This technological gap has direct implications for Apple’s product development. The iPhone 18 Pro models, anticipated for release in 2026, are expected to incorporate A20 Pro chips manufactured using a 2-nanometer process. Given the current and projected capabilities of TSMC’s U.S. facilities, these advanced chips will need to be sourced from TSMC’s Taiwanese operations, as the U.S. plants will not yet have the capacity to produce them.
Challenges in Bridging the Technological Divide
Several factors contribute to this lag in technological advancement between TSMC’s U.S. and Taiwanese facilities:
1. Established Infrastructure in Taiwan: TSMC’s longstanding presence in Taiwan has allowed the company to develop a robust infrastructure and supply chain, facilitating rapid advancements in semiconductor technology.
2. Regulatory and Permitting Hurdles in the U.S.: The construction and operationalization of semiconductor fabs in the United States are often subject to complex regulatory and permitting processes, which can extend timelines significantly. TSMC’s CEO, C.C. Wei, highlighted that these requirements have lengthened the construction process in Arizona compared to Taiwan.
3. Skilled Workforce Shortages: The U.S. semiconductor industry faces a shortage of skilled workers, including technicians, computer scientists, and engineers. This talent gap poses challenges in staffing advanced manufacturing facilities and achieving high production yields.
4. Supply Chain and Cost Considerations: Higher operational costs and supply chain gaps in the U.S. can impede the rapid deployment of advanced manufacturing technologies. TSMC has noted that chemical supply costs and labor challenges are more pronounced in the U.S. compared to Taiwan.
Strategic Considerations and Future Outlook
The U.S. government’s CHIPS Act, which includes $39 billion in manufacturing incentives, aims to bolster domestic semiconductor production and reduce reliance on foreign supply chains. TSMC’s investment in U.S. facilities aligns with this initiative. However, the technological lag underscores the challenges in rapidly achieving parity with established operations in Taiwan.
Former Intel CEO Pat Gelsinger has expressed skepticism about the effectiveness of such investments in reviving U.S. chipmaking dominance without concurrent advancements in research and development. He emphasized that merely establishing manufacturing facilities without relocating core R&D activities to the U.S. may not suffice to restore semiconductor leadership.
Conclusion
While TSMC’s expansion into the United States represents a significant step toward diversifying global semiconductor manufacturing, the anticipated five-year lag in technological capabilities compared to Taiwan highlights the complexities involved. Addressing regulatory challenges, workforce development, and supply chain issues will be crucial for the U.S. to close this gap and enhance its position in the global semiconductor industry.
