The world’s largest contract chipmaker has decided that three expansion sites for its most advanced shipping node are not enough, and will add a plant in southern Taiwan.
TSMC chair C.C. Wei told investors on Oct 19 that a further 3nm fab would be built in Tainan, with mass production slated for the first half of 2028. It becomes the fourth 3nm expansion project, joining sites in Tainan, Arizona and Kumamoto.
Wei framed the decision as a break with precedent. In past cycles, capacity for a given node stopped expanding once it hit its target. Demand for 3nm, he said, is expected to stay strong for several years, so the company chose to keep adding.
Twenty fabs in motion
The company said roughly 20 fabs are in development, including 13 foundries and packaging facilities on the island and five or six abroad. The 3nm plant already under construction at the Southern Taiwan Science Park starts production in the first half of 2027.
The second Arizona fab has finished building work and is installing equipment, with production being pulled forward. Tainan officials said TSMC has invested more than NT$1.86T, about $57B, across 3nm and 5nm lines and packaging in the city, creating over 11,300 jobs.
Behind the expansion sits a memory crunch and a parallel squeeze on advanced logic. Buyers of AI accelerators have been booking capacity years ahead, and foundry pricing has firmed as a result. Adding a plant takes years to deliver wafers, which is why the company commits now rather than waiting for the shortage to peak.
The risk sits on the other side of the cycle. If accelerator demand cools before 2028, a fourth 3nm site lands into a softer market with fixed costs attached.
