Introduction
TSMC is set to make its biggest investment yet, allocating $42 billion in 2025 to build nine new semiconductor fabs across Taiwan, the US, Japan, and Germany.
This ambitious expansion aims to ramp up production of next-gen AI and 5G chips using advanced nodes like 2nm and 1.6nm, positioning TSMC to meet soaring global demand and maintain its semiconductor manufacturing dominance.
The company aims to stay ahead in the fiercely competitive semiconductor industry by increasing capacity and upgrading technology.
Follow us on Linkedin for everything around Semiconductors & AI
Five Key Points
TSMC plans to build and equip nine new production facilities in 2025.
Eight are semiconductor fabs; one is an advanced packaging facility.
The investment of up to $42 billion marks a significant rise from $29.2 billion in 2024.
New fabs will produce chips using advanced nodes like 2nm and 1.6nm.
Major fabs will be built in Taiwan, the US (Arizona), Japan, and Germany.
Background: Why So Much Spending?
TSMC has steadily increased its capital expenditure (CapEx) over the past decade. In 2015, the company spent about $8 billion on expansions and upgrades.
By 2024, that number ballooned to nearly $30 billion, and 2025’s forecast of $42 billion represents the company’s biggest spending spree yet.
The rise in spending is driven by two main factors: growing demand for TSMC’s advanced chips and the increasing cost of building and equipping fabs.
Next-generation manufacturing equipment, especially extreme ultraviolet (EUV) lithography machines, costs hundreds of millions of dollars each.
To keep pace with industry trends and customer needs, TSMC is rapidly scaling production and adopting cutting-edge technology.
What’s Being Built?
TSMC revealed the details of its nine new facilities, spread across Asia, North America, and Europe:
| Facility Name | Location | Production Phase | Technology Nodes | Status |
|---|---|---|---|---|
| AP7 | Chiayi, Taiwan | Phase 1 | Advanced packaging | Under construction |
| Fab 20 | Hsinchu, Taiwan | Phase 1 | 2nm (N2), 1.6nm (A16) | Equipping, ramping H2 2025 |
| Fab 21 Ph 2 | Phoenix, Arizona | Phase 2 | 3nm (N3) | Equipping |
| Fab 21 Ph 3 | Phoenix, Arizona | Phase 3 | 2nm (N2), 1.6nm (A16) | Under construction |
| Fab 22 | Kaohsiung, Taiwan | Phase 1 | 2nm (N2), 1.6nm (A16) | Equipping, ramping H2 2025 |
| Fab 23 (JASM) | Kumamoto, Japan | Phase 2 | Sub-10nm | Under construction |
| Fab 24 (ESMC) | Dresden, Germany | Phase 1 | 12nm, 16nm, 22nm, 28nm | Under construction |
| Fab 25 | Taichung, Taiwan | Phase 1 | Future 1.4nm (A14?) | Planned construction late 2025 |
TSMC’s US presence continues to grow, with the Arizona fabs focused on the latest nodes. Japan and Germany also play key roles, highlighting TSMC’s global footprint.
What This Means for the Chip Industry
TSMC’s $42 billion plan shows the company’s commitment to leading semiconductor manufacturing. Its advanced fabs will produce chips for everything from smartphones to AI servers.
The expansion will also help ease the ongoing global chip shortage and support technological innovation worldwide.
However, the high costs and complexity of fab construction pose challenges. TSMC must deliver these projects on time to meet customer demand and stay competitive against rivals like Samsung and Intel.
techovedas.com/why-tsmc-is-the-unseen-giant-behind-every-modern-gadget
Conclusion
TSMC is betting big on 2025 with its largest capital investment ever. Building nine new fabs and packaging sites signals the company’s determination to dominate future chip markets.
As tech giants increasingly rely on powerful semiconductors, TSMC’s expansion could shape the next decade of innovation.
For more of such news and views choose Techovedas! Your semiconductor Guide and Mate!
