TSMC is one of the biggest names in chip manufacturing, and plenty of big names such as Apple, Intel, Nvidia, AMD, and more rely on these chips to power their hardware. Recently, TSMC opened a new factory in Arizona due to the geopolitical landscape and U.S. policies promoting local manufacturing.

The new plant, however, has found itself overwhelmed with the demand as American companies are pushing toward “Made in America” products, according to a new report. This comes after a number of U.S.-China tariff disputes that convinced tech companies to reduce their reliance on manufacturing in China.

Why is TSMC's Arizona-based factory overwhelmed?

TSMC has done a great job of providing next-gen chips to some of the biggest names in the tech market, and even the latest Intel Arrow Lake processors made the shift to TSMCs chips to reduce the CPU process node size to 3nm as the last gen (14th-generation) was still using 10nm process nodes).

This gave Intel a huge bump to better compete with AMD, but the odds are still in Team Red's favor. That being said, Apple is the biggest customer of TSMC, and besides that, AMD, Qualcomm, Broadcom, and Nvidia are also part of the list, and since all of these a multi-million dollar companies, it would be easy to assume that they have big orders to cater to their consumer bases. 

Another factor is the 2nm node that TSMC is expected to launch later this year, and every company is in a race to reduce the transistor size in their products, as that leads to better performance and efficiency. 

Nvidia is also pushing for its AI chips to be made in America and has been verified in TSMC's new plant for mass production. However, another aspect is that some of the major customers of TSMC have brought to attention the rising prices as they said “(TSMC) has and may continue to increase its quotations in the future”. 

It isn't out of the ordinary for businesses to increase the prices of their products and services because when the production is moved elsewhere, in this case, the U.S., from a region where costs and labour don't cost as much, initially, it is a huge blow to the entire landscape but in the long run, it is better for the economy. 

So, while TSMC might be overwhelmed due to the demand for their chips, and companies might be in a pickle dealing with the rising prices, it should streamline itself in the years to come.

About the Author

Ussamah Mehmood

Ussamah works as a content writer and editor at BGFG. He is experienced in tech, hardware, gaming, and marketing.