One of the long-standing limitations of TSMC’s manufacturing presence in the United States has been that chips produced at its Arizona facility are not entirely completed on American soil. While wafers are fabricated at Fab 21 in Arizona, they must currently be shipped back to Taiwan for critical backend steps, including dicing, testing, and advanced packaging.
This logistical gap has meant that, despite U.S.-based fabrication, the final processors cannot truly be classified as fully American-made.
That situation may change sooner than expected. According to a report from Taiwan-based Liberty Times, TSMC is considering a significant shift in its Arizona expansion strategy—one that could fast-track advanced packaging operations in the U.S. and potentially enable end-to-end chip production in America before 2030.
Packaging Facility Could Replace a Planned Fab Module
Under TSMC’s Arizona expansion plan announced in March, the company intends to build:
- Six Fab 21 modules for advanced chip manufacturing
- Two advanced packaging facilities
- A research and development center to adapt leading-edge technologies for key customers
Liberty Times claims TSMC is now planning to repurpose land originally reserved for Fab 21 Phase 6 and instead use it to construct one of its advanced packaging facilities. If accurate, this would represent a meaningful reprioritization of backend capabilities over additional front-end wafer fabrication capacity.
According to the report, construction under this revised plan could allow tool installation to begin before the end of 2027, with the facility entering risk production shortly thereafter. That timeline would significantly advance TSMC’s ability to handle packaging in the U.S. rather than relying on overseas operations.
Why Advanced Packaging Is Different From Chip Fabrication
Advanced packaging facilities, while technically sophisticated, differ fundamentally from leading-edge semiconductor fabs:
- Front-end fabs like Fab 21 require massive, multi-story cleanrooms with ISO 3–4 standards to support atomic-level patterning.
- Advanced packaging plants operate at the micron scale, using smaller ISO 5–7 cleanrooms, lower chemical purity, and substantially less power.
The processes involved—such as chip bonding, redistribution layers (RDL), and advanced interconnects—do not demand the same extreme environmental controls as 3 nm-class wafer fabrication.
Because of these differences, advanced packaging plants are faster and less costly to build. Locating one close to a front-end fab also reduces transportation risk, logistics complexity, and supply-chain exposure.
Why Move So Soon—and Why Phase 6?
From a site-planning perspective, inserting an advanced packaging facility where Fab 21 Phase 6 was originally intended is somewhat unconventional. The Arizona campus was designed with six contiguous fab modules in mind, which normally would favor uniform expansion.
However, such a decision makes sense if time has become the overriding factor. TSMC may face pressure to establish domestic backend capabilities by 2027, potentially driven by:
- Customer demand, particularly from U.S. technology companies seeking fully domestic supply chains
- Geopolitical and trade risks, including the possibility of future tariffs targeting offshore packaging
- Government incentives and policy expectations, tied to the CHIPS Act and “made in America” initiatives
In that context, sacrificing one future fab module to bring packaging online sooner could be a strategic compromise.
The Amkor Partnership—and Why It May Not Be Enough
TSMC is not abandoning its partnership strategy. The company continues to work with Amkor, which is building a major assembly and test facility in Arizona, with Apple as its anchor customer. Amkor’s plant is expected to begin production around 2028, positioning it as a key U.S.-based OSAT (Outsourced Semiconductor Assembly and Test) provider by the end of the decade.
However, the timing of Amkor’s ramp-up does not align with what TSMC may now require. By accelerating an in-house advanced packaging facility, TSMC can bring backend capacity online earlier than the partner-driven approach would allow, while still maintaining Amkor as part of its long-term U.S. ecosystem.
TSMC has been approached for comment, but the company has not publicly addressed the report. Industry observers expect that any confirmation—or denial—would likely come during TSMC’s earnings call in January, rather than through interim statements.
If the Liberty Times report proves accurate, the move would mark a pivotal step in TSMC’s U.S. strategy. By integrating fabrication, advanced packaging, and testing within the United States, the foundry would not only reduce reliance on cross-Pacific logistics but also make truly “all-American” TSMC chips feasible years earlier than previously anticipated.
