(By Fang Zhou, Editor: Lv Dong)

Recently, the world's leading chip foundry in Taiwan, TSMC, released its second-quarter 2025 financial report. Data shows that TSMC's net profit after tax in the second quarter of this year was 398.27 billion New Taiwan Dollars (approximately 94.78 billion Chinese Yuan). Among these, the newly established TSMC factory in the United States, which has just started production, finally turned a profit after four years of losses and contributed an investment income of 6.447 billion New Taiwan Dollars (approximately 1.534 billion Chinese Yuan) to the parent company for the first time.

According to reports, since TSMC announced its move to "Made in America," the factory set up in Arizona, USA, has seen increasing losses year by year since 2021. Over the past four years, it has accumulated losses exceeding 39.4 billion New Taiwan Dollars. Until the end of last year, it was still in a loss-making state, with losses of 4.976 billion New Taiwan Dollars in the third quarter of 2024 and 4.979 billion New Taiwan Dollars in the fourth quarter of 2024.

TSMC's Arizona factory finally achieved small-scale profits in the first quarter of this year—only 496 million New Taiwan Dollars. However, the investment income recognized by the parent company TSMC was still a loss of 1.931 billion New Taiwan Dollars. Moreover, although TSMC's US factory contributed 6.447 billion New Taiwan Dollars in investment income to the parent company this time, this profit accounted for only 1.62% of TSMC's net profit after tax in the second quarter. The profitability of this factory is still under observation.

TSMC previously announced an investment of 65 billion US dollars to build three advanced process chip factories in the United States, followed by an additional investment of 100 billion US dollars to build three more advanced process chip factories, two advanced packaging factories, and one research and development center. From the current progress, the construction of P1 factory has been quite complicated and was put into operation at the end of last year. P2 factory has been completed, and the facility engineering has gradually been put into place, with sources indicating that it is expected to start moving equipment in the third quarter of next year and begin mass production in 2027. P3 factory has also begun planning. Industry expectations suggest that P2 factory will be a 3nm process, better meeting the needs of high-value products from customers, driving quick profitability for TSMC's P2 factory in the United States.

The TSMC factory located in Arizona, USA. TSMC official website

On the other hand, although TSMC's US factory has somewhat boosted market confidence, the first chip factory operated by its subsidiary JASM in Kumamoto, Japan, is still in a loss-making state. Since the third quarter of 2024 to the second quarter of this year, it has suffered losses of 1.119 billion New Taiwan Dollars, 1.187 billion New Taiwan Dollars, 3.249 billion New Taiwan Dollars, and 2.973 billion New Taiwan Dollars, respectively. The investment income contributed to the parent company TSMC has also been in a loss of 798 million New Taiwan Dollars, 863 million New Taiwan Dollars, 2.36 billion New Taiwan Dollars, and 2.16 billion New Taiwan Dollars, respectively. It has not yet turned a profit so far.

According to sources, during the same period, the capacity utilization rate of the first wafer factory of JASM was only about 50%, mainly due to fierce competition in mature process nodes. Although TSMC is focusing on specialty processes, even with subsidies from the Japanese government, insufficient capacity utilization has dragged down overall profitability.

The report cited sources stating that the lack of clear signs of recovery in the automotive and consumer markets is one of the reasons for the slowdown in the construction progress of the second factory in Kumamoto, Japan. Additionally, the report pointed out that Japan lacks customers using advanced process technology, especially in core autonomous driving chips, where Japanese manufacturers are no longer dominant. This is another factor contributing to the low capacity utilization of TSMC's business in Japan.

The Taiwanese media "Gongshang Times" analyzed that compared to the first chip factory of TSMC in Arizona, which began mass production of 4nm chips at the end of last year, after two quarters of mass production, the monthly capacity is now approximately 34,000 wafers, all of which have been booked by customers such as Apple and AMD. However, the construction costs and labor costs of TSMC's US factory are high, and the subsidies from the "Chip Act" can only reduce part of the costs. The key to whether the US factory can turn a profit remains the capacity utilization and product gross margin.

On the evening of August 18, TSMC responded to related data, stating that the profit of the Arizona factory was mainly due to "high capacity utilization brought by strong market demand." However, TSMC also pointed out that starting from 2025, due to overseas factories gradually beginning mass production, the gross margin will be further diluted, "the initial impact is about 2-3% per year, and later it will expand to 3-4%."

In addition to the uncertainties in the operation of the factories themselves, the stance of the US government towards TSMC has further deepened concerns. Recently, the US government has once again shown interest in investing in TSMC.

On the local time of August 19, US Commerce Secretary Rutnik complained that the "Chip Act" introduced during the Biden administration provided subsidies to semiconductor manufacturers, but American taxpayers had no returns.

Rutnik also specifically mentioned TSMC. He said, "Imagine that the Biden administration is actually giving money to Intel for free, giving money to TSMC for free, and giving money to all these companies for free." He also suggested that President Trump could seek deals with other funded companies—that is, exchange equity in companies like Micron, TSMC, and Samsung for funds from the "Chip Act."

The US government has already taken similar actions. Earlier this year, Trump approved the acquisition of US Steel by Japan's Nippon Steel, but with the condition of obtaining a "golden share." This share can prevent companies from reducing or delaying their committed investments without the president's consent, transferring production or jobs abroad, or closing or idling factories before a certain time.

Rutnik also stated that, due to "national security considerations," the US hopes to bring some chip manufacturing back to the country, "We need to produce chips ourselves; we cannot rely on Taiwan."

As of the time of writing, TSMC has refused to comment.

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Original: https://www.toutiao.com/article/7540505223802978868/

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