Taiwan Semiconductor Manufacturing Company (TSMC) has begun construction of its second plant in Arizona ahead of schedule, with installation slated for completion in the third quarter of 2026. The facility, known as P2 (second plant), will utilise a three-nanometre (3 nm) process and is expected to begin production in 2027.
The move addresses growing customer demand for US-based manufacturing and aims to respond to trade measures such as US tariffs, The Commercial Times reported. Equipment installation is expected to begin as early as September 2026, with full production targeted for the following year.
Construction on P2 officially commenced in April 2025. The two-year build time reflects a compressed schedule, with the project running at full speed to meet customer needs. Equipment vendors noted that post-construction, internal factory adjustments typically require around two years.
The project is also expected to benefit Taiwanese engineering companies, such as Han Tang and Fanxuan, which previously worked on TSMC’s first Arizona facility (P1). Supply chain participants indicated these firms are expected to improve long-term profits due to prior experience.
Meanwhile, suppliers of speciality gases and chemicals are set to receive increased orders from North America, with companies such as Shangpin and Shengyi attracting positive attention from market analysts.
Despite these developments, Taiwan remains a central part of TSMC’s operations. Advanced packaging, including Chip-on-Wafer-on-Substrate (CoWoS), will continue to be handled in Taiwan. Although TSMC has announced plans for two advanced packaging facilities in the US, construction of the first, AP1, is not expected to begin before the third quarter of 2026.
Industry sources told The Commercial Times that most of TSMC’s US plant developments are unlikely to reach full capacity before 2029. In the meantime, prices for US-produced wafers are expected to rise by over 10%, while global wafer prices are anticipated to increase by 3% to 5% next year, driven by demand for AI and increasing construction costs.
TSMC’s investment in its home market continues. Nine new factories and 11 production lines are currently under development in Taiwan. Among these, the Kaohsiung F22 plant for 2-nm technology is scheduled for relocation in Q3 2025, with a third facility expected to be completed by Q1 2026.
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