TAIPEI (Taiwan News) — TSMC plans to operate an advanced chip packaging facility in Arizona by 2029, expanding its US manufacturing footprint and potentially reducing the need to send chips back to Taiwan for final processing, according to a Reuters report.

AI chips, such as those designed by Nvidia, are composed of multiple smaller chips integrated using advanced packaging technologies. This stage of production has become a key bottleneck in the global semiconductor supply chain.

TSMC said earlier this year during a January earnings call that it was applying for permits to begin construction of its first advanced packaging facility at its Arizona site. However, it did not provide a timeline for operations.

Deputy co-chief operating officer Kevin Zhang (張曉強) confirmed on Wednesday, ahead of a conference in Santa Clara, California, that the company aims to have the facility operational before 2029. Construction has already begun, according to Reuters.

“We are going to build a CoWoS capability and 3D-IC capability there before 2029, so that is still our goal,” Zhang said, referring to two of TSMC’s advanced packaging technologies that are in high demand.

Currently, companies including Apple and Nvidia have started sourcing chips from TSMC’s Arizona fabs. But many still require shipment to Taiwan for packaging.

Meanwhile, Amkor Technology said last year it's working with Apple and Nvidia to build a separate packaging facility in Arizona. Completion is targeted by mid-2027 and production in early 2028, ahead of TSMC’s timeline.

TSMC and Amkor said in 2024 they would collaborate to bring some of TSMC’s advanced packaging technologies to Arizona, though details were not disclosed. Zhang said technical discussions between the two companies are ongoing.

“We are partnering with them to see what kind of technology capability they can offer to our customers to accelerate some of the products to be manufactured in the US,” Zhang said. “There are still some moving parts. I would say we are definitely looking at all possibilities to have a very diverse manufacturing footprint.”