Taiwan Semiconductor (TSM) - Get Free Report, the world's biggest contract chipmaker, is set to unveil plans for a second manufacturing site in Arizona Tuesday, taking its overall U.S. investment to more than $40 billion.
TSMC, as it is often known, will host President Joe Biden at its plant in Phoenix later today as moves towards making the $12 billion facility -- which is expected to create around 1,600 U.S.-based job -- fully operational by 2024.
TSMC is also expected to begin processing some of Apple’s (AAPL) - Get Free Report new A-series and M-series chips at the new plant, with reports of plans to double overall capacity to around 40,000 wafers per month.
The company is also set to unveil plans for a second facility, which will begin producing higher-end chips in 2026, at today's event. Nvidia (NVDA) - Get Free Report CEO Jensen Huang, who will attend the event along with Apple's Tim Cook and Micron's (MU) - Get Free Report Sanjay Mehrotra, called TSMC's investment a "game-changing development for the industry".
Nvidia shares were marked 0.16% higher in pre-market trading at $166.36 each while Micron nudged 0.39% higher to $54.25 each.
The ramp-up of chipmaking capacity in the U.S., which has ceded market leadership to southeast Asia over the past two decades, will form a key plank in Apple's strategy to wean itself from reliance on supply chains that stem from facilities in China.
Reports from late November, in fact, indicated Apple could see a 6 million shortfall in iPhone production from disruptions at its key manufacturing plant run by Taiwan's Foxconn in the Covid-hit city of Zhengzhou.
Apple itself cautioned in early November that Covid restrictions at the 200,000-person plant would curtail shipments of its higher-end iPhones heading into the holiday season in most of its global markets.
Last month, TSMC posted its strongest quarterly profits in two years, with net profits for the three months ending in September of T$280.9 billion on revenues of $20.23 billion, but struck a downbeat note for the chip sector heading into 2023.
TSMC lowered its 2022 capex forecast -- a key chip and smartphone industry benchmark -- to around $36 billion from a summer estimate of between $40 billion and $44 billion, citing supply chain challenges and a softer near-term outlook linked to a slowdown in global demand and the broader impact of U.S. export restrictions of high-tech chips to China-based companies.