Recent reports from Taiwan media indicate that the Taiwan Semiconductor Manufacturing Company (TSMC) is facing a significant timeline in establishing a robust supply chain in the United States. While TSMC´s suppliers have expressed their willingness to support the company´s US expansion, their current incentives to set up branch offices are limited by the relatively low production volumes in TSMC’s existing American fabs, even after factoring in US tariffs. The consensus among stakeholders suggests it could take up to ten years before TSMC´s US operations are supported by a supply chain comparable to that of its facilities in Taiwan and China.
The Taiwanese government has engaged in discussions with chemical suppliers essential to semiconductor manufacturing, concluding that the present scale of TSMC’s US production does not justify the substantial investment required to create a local supply infrastructure. These stakeholders estimate that establishing a comprehensive US supply chain could take seven to eight years from initiation. However, if TSMC’s production in Arizona scales according to its publicly outlined roadmap, the likelihood increases that more of its suppliers will make the move, setting up their own operations stateside to support the semiconductor giant’s expansion.
An interesting aspect is that TSMC apparently has not prioritized engaging with existing US-based suppliers, including those currently serving Intel. This decision is notable since many of these suppliers provide chemicals and materials similar to those TSMC´s Asia-based partners supply. Possible reasons include uncompetitive pricing from Intel´s suppliers or a preference among TSMC’s established partners to wait until larger volumes are achieved. Over time, as TSMC grows its US fabrication capacity, the semiconductor materials market in the US is expected to become more competitive, benefiting from additional supplier participation and potentially driving innovation and efficiency in the industry.
