TSMC Eyes Strategic Packaging Capacity Boost in Arizona as Semiconductor Packaging Challenges Persist

According to Governor Katie Hobbs, Taiwan Semiconductor Manufacturing Co TSM is in discussions with Arizona authorities to add advanced chip packaging capacity at its plants in the state. 

This move comes as packaging becomes a bottleneck in semiconductor production, particularly for high-demand products like Nvidia Corp's NVDA AI accelerators. 

TSMC has committed to expanding packaging capacity in Taiwan, but supply constraints will likely persist for another 18 months, Bloomberg reports. 

The company's commitment to Arizona includes two fabs and a $40 billion investment, with plans to produce more advanced 4-nm chips at the Arizona facility. 

Packaging has become a crucial battleground for countries seeking to assert their tech leadership. 

The company's decision to offer more advanced 4-nm chips from its Arizona plant highlights its strategic partnership with major customers like Apple Inc AAPL.

TSMC holds the highest number of advanced packaging patents with 2,946 and is ranked highest in quality based on citation frequency, as per LexisNexis.

Recent reports indicated TSMC urging major suppliers to postpone the delivery of high-end chipmaking equipment as the leading contract chipmaker battled delays at its $40 billion chip factory in Arizona, signaling its growing apprehension about customer demand triggering a selloff in semiconductor stocks. 

Price Action: TSM shares closed higher by 0.19% at $89.00 on Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.