TAIPEI (Taiwan News) — TSMC’s Arizona facility, a key part of the company’s overseas expansion and US efforts to strengthen domestic chip manufacturing, reported a 99% drop in third-quarter profits from the previous quarter.
According to TSMC’s Q3 financial report, its US subsidiary posted NT$41 million (US$1.3 million) in profit, down from NT$4.2 billion in Q2, CTEE reported. By contrast, TSMC’s overall Q3 operating profit reached NT$500.7 billion, up 8% from the previous quarter, according to CTEE.
Institutional investors expect short-term earnings to remain under pressure as TSMC’s second Arizona fab, scheduled for full installation in Q2 next year, ramps up. Cost pressures have intensified with advanced process nodes, which require more expensive equipment and labor-intensive setups.
TSMC’s first Arizona fab has already begun mass production, contributing to the parent company’s investment income. The second fab’s 3-nm line is slated for 2027, which is expected boost capacity utilization and become a key driver of US-based growth.
The Arizona expansion is seen as a positive step toward a more independent US supply chain. However, substantial resources are still being devoted to construction, equipment installation, and mass production preparations.
Institutional investors say profitability is unlikely to improve until production reaches scale. The upcoming launch of 3-nm manufacturing is seen as a key milestone for the site’s long-term competitiveness, according to CTEE.
Industry analysts note that the US still trails Taiwan and Japan in supply chain maturity, technical workforce development, and equipment maintenance. Deploying large numbers of Taiwan-based engineers to support the Arizona site has further increased operating costs compared with TSMC’s other overseas locations.
Looking ahead, future process nodes will demand even more resources, suggesting that US operations may continue to have lower profit margins than other regions. Analysts say a smooth rollout could allow the Arizona fabs to play a larger role in TSMC’s global advanced manufacturing strategy.
