TSMC disclosed that it received a record TWD 167.586 billion in subsidies for overseas expansion during the first three quarters. Its fab in Arizona, United States, recorded a profit, while JASM posted a modest profit and ESMC was in the red.
TSMC, the leading semiconductor manufacturer, explained in its earnings disclosure that the total subsidies it received from the governments of the United States, Germany, Japan and China during the first three quarters of this year reached TWD 167.586 billion, setting a new record. TWD 166.996 billion was recorded in the third quarter alone, a substantial increase from the first half. The subsidies are based on contracts entered into by local subsidiaries with local governments and are intended to cover part of the costs of acquiring real estate and equipment and constructing and operating fabs.
Performance at overseas sites varied by region. The Arizona fab in the United States returned to profitability, helped by subsidies received through the first half and by its operating performance, recording profit of TWD 53.986 billion in the first three quarters and investment profit of TWD 48.558 billion. JASM recorded profit of TWD 2.396 billion, while ESMC posted a loss of approximately TWD 1.079 billion.
In terms of fab construction progress, the first fab in Arizona is scheduled to begin volume production of 4-nanometre products in the fourth quarter of 2024. Equipment is being delivered and installed at the second fab, which is expected to begin volume production of 3-nanometre products in the third quarter of 2027. The first fab in Kumamoto, Japan, entered volume production at the end of 2024, while the second fab’s 3-nanometre plan is progressing toward a target launch in 2028.
Analysts believe that the Arizona fab is moving toward a return to profitability on contributions from subsidies and its operating business, and that the US sites’ contribution to profit is expected to increase further after the second fab begins operations in 2027. ESMC in Europe, meanwhile, remains in the red, and attention is focused on the nature and timing of the subsidies.