Analysis of Mass Production of N4P Process at TSMC's U.S. Factory and the Impact of Customer Order Diversion

Based on the latest search results and data analysis, I will prepare an in-depth analysis report on the mass production of the N4P process at TSMC’s U.S. factory and the impact of customer order diversion.

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TSMC’s Arizona wafer fab (Fab 21) has undergone multiple adjustments in its construction. According to the latest information, the mass production timeline for the N4P process at this factory is as follows [1][2]:

Phase	Original Planned Time	Actual/Adjusted Time	Main Reason
Factory Construction Completion	Early 2024	Completed on Schedule	-
Equipment Installation	2024	Slightly Delayed	Shortage of Skilled Workers
Pilot Production Phase	Mid-2024	Q3-Q4 2024	Accelerated Personnel Training
Mass Production	Early 2025	Entered mass production in Q4 2024	Smooth Capacity Ramp-Up

TSMC Chairman Mark Liu clearly stated on the Q4 2025 earnings conference call that the first factory in Arizona, U.S. successfully entered mass production in Q4 2024, and equipment relocation and installation for the second factory is scheduled for 2026 [2].

N4P is an enhanced version of TSMC’s 5nm series, with the following technical advantages:

• Performance Improvement
  : Compared to the original N5 process, N4P delivers approximately 6% higher performance at the same power consumption
• Power Consumption Optimization
  : Reduces power consumption by approximately 8% at the same performance level
• Design Compatibility
  : Maintains IP compatibility with the N5 process, reducing customer migration costs
• Yield Performance
  : According to reports, the yield rate of the Arizona factory has approached the level of similar factories in Taiwan [3]

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According to supply chain sources, TSMC’s Arizona factory has received order support from multiple U.S.-based tech giants, with initial customers including [3][4]:

Customer	Product Type	Process Node	Estimated Capacity Share
Apple	A16 Bionic Chip	4nm (N4P)	~35%
NVIDIA	Blackwell Architecture GPU	4NP	~25%
AMD	5th Gen EPYC Processor	4nm	~20%
Qualcomm	Snapdragon Series	4nm	~12%
Broadcom	Network Chips	4nm	~8%

The

(12-inch) [3]. Since production began in early 2025, the factory has produced over 20,000 wafers in its first batch, mainly to meet the initial demand of the aforementioned customers.

However, it should be noted that:

1. Capacity Far Lower Than Main Factories in Taiwan
   : The monthly capacity of a single TSMC factory in Taiwan can exceed 100,000 wafers
2. Advanced Packaging Still Relies on Taiwan
   : The first batch of chips needs to be shipped to Taiwan for advanced packaging using CoWoS technology
3. Severe Pre-Locking of Orders
   : TSMC’s 2025 capacity has been largely fully booked, making it difficult for new customers to obtain capacity [5]

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Despite concerns about delays, actual data shows

has occurred, for the following reasons:

TSMC has mitigated customer pressure caused by delays through the following methods:

• Accelerated Capacity Allocation in Taiwan Factories
  : Redirected some urgent orders back to Taiwan for production
• Advanced Training Program
  : Deployed experienced technical personnel from Taiwan to train local workers
• Flexible Production Scheduling
  : Optimized capacity allocation using cross-factory process flexibility [2]

U.S.-based customers’ emphasis on TSMC’s U.S. factory is more out of consideration for

, rather than completely replacing Taiwanese capacity:

• Apple
  : Still relies on Taiwanese factories for 3nm process chip production; the U.S. factory mainly produces mature high-end chips
• NVIDIA
  : Blackwell GPUs are produced in the U.S. factory, but CoWoS packaging is still done in Taiwan
• AMD
  : Server CPU orders are distributed across multiple factories, reducing single-source risk [4]

Although no obvious diversion has occurred in the short term, the following factors may trigger order adjustments in the medium to long term:

Risk Factor	Impact Assessment	Potential Diversion Direction
Cost Difference	Production costs at the U.S. factory are expected to be 30% higher than in Taiwan [3]	Cost-sensitive customers may take a wait-and-see approach
Yield Ramp-Up	The yield rate of the new factory still needs time to optimize	High-value chips may continue to be produced in Taiwan
Intel Competition	The 18A process aims to compete for top customers	Apple and NVIDIA may evaluate alternative solutions
Samsung’s Catch-Up	Plans to launch 2nm process at the Texas factory [6]	New customers such as Tesla have been acquired by Samsung

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According to TSMC’s official disclosure of its U.S. factory development plan [2][6]:

Arizona Factory Cluster (GIGAFAB)
│
├── Fab 21 Phase 1 (Mass Production)
│   ├── Process: 4nm (N4P)
│   ├── Capacity: 24,000 wafers/month
│   └── Customers: Apple, NVIDIA, AMD, Qualcomm, Broadcom
│
├── Fab 21 Phase 2 (Construction Completed)
│   ├── Process: 3nm
│   ├── Mass Production Time: 2027 (one year ahead of schedule)
│   └── Customers: Expected to undertake 2nm chip demand
│
├── Fab 21 Phase 3 (Under Construction)
│   ├── Process: 2nm (N2)
│   ├── Mass Production Time: 2028
│   └── Customers: Apple A20/A20 Pro prioritized
│
└── Future Plans
    ├── 4th Factory (Under Application)
    ├── Advanced Packaging Factory (Under Planning)
    └── R&D Team Center

• Total Investment Scale
  : By 2026, TSMC’s investment in the U.S. will reach
  $165 billion
  [3]
• Federal Subsidies
  : Received billions of dollars in subsidies under the “CHIPS and Science Act”
• Tariff Preferences
  : According to reports, the U.S. may reduce tariffs on Taiwanese goods from 20% to 15% [7]

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Intel is accelerating the commercialization of its 18A (1.8nm-class) process [6][8]:

• Mass Production Time
  : Entered mass production in 2025, with expanded application in 2026
• Target Customers
  : Top customers such as Apple and NVIDIA
• Technical Advantages
  : RibbonFET (GAA Transistor) + PowerVia (Backside Power Delivery)

Samsung’s wafer foundry business is seizing market share through the following methods:

• Texas Factory Upgrade
  : Abandoned the original 4nm plan and directly launched the SF2 (2nm) process
• Customer Breakthrough
  : Successfully acquired key customers such as Tesla
• Yield Improvement
  : 2nm yield rate has increased to 40%-50%, with a target of 70% [8]

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1. Limited Impact of N4P Process Mass Production Delays
   : Despite short-term delays, the N4P process at the Arizona factory entered mass production in Q4 2024, with overall impact controllable

2. No Large-Scale Order Diversion Occurred
   : Major customers (Apple, NVIDIA, AMD, etc.) still maintain trust in TSMC, with orders mainly remaining within the system

3. Capacity Bottlenecks Still Concentrated in Advanced Packaging
   : Advanced packaging capacity (especially CoWoS) has become a constraining factor; chips still need to be shipped to Taiwan for packaging

4. Medium-to-Long-Term Competitive Pressure Rises
   : The catch-up of Intel’s 18A and Samsung’s 2nm may trigger order reallocation in 2027-2028

Time Node	Expected Progress	Key Observation Points
2026	Advanced mass production of 3nm process	Customer onboarding speed, yield performance
2027	Pilot production of 2nm process	Order ownership of Apple’s A20 chip
2028	Formation of a complete factory cluster	Cost structure improvement, local packaging capability

The construction and mass production of TSMC’s U.S. factory marks a key milestone in the “U.S. manufacturing” layout of the global semiconductor supply chain. Despite multiple challenges such as costs, yield rates, and talent, relying on its technological leadership and long-term customer partnerships, TSMC is expected to establish a solid manufacturing foothold in the North American market while providing customers with a geographic redundancy option to address geopolitical risks.

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[1] SupplyChainBrain - “TSMC Postpones Starting Production at Its Arizona Factory” (2023-07-21)
[2] Cailianshe - “AI Demand is Fierce! Transcript of TSMC’s Earnings Conference” (January 2026)
[3] Electronic Business World - “TSMC’s U.S. Factory Produces First 4nm Wafers; NVIDIA/Apple Orders Are in Place” (June 18, 2025)
[4] Sina Tech - “Will TSMC’s Largest Customer in 2025 Change?” (October 15, 2025)
[5] CIO - “Delays in TSMC’s Arizona plant spark supply chain worries”
[6] IT Home - “Report: Mass Production of 3nm Process at TSMC’s Arizona Factory Advanced to 2027” (December 30, 2025)
[7] DT Semiconductor Materials - “Tariff Reduced to 15%; TSMC to Build at Least 5 More Factories in the U.S.” (January 13, 2026)
[8] Securities Times - “Chip Process ‘Breaks 2nm Enters 1nm’; 1.4nm Process May Enter Pilot Production in 2027” (January 12, 2026)