TSMC's US Plant Faces Losses While Nanjing Factory Thrives: A Tale of Two Chip Worlds

Navigating the Global Semiconductor Landscape: Analyzing TSMC's Overseas Profitability

Taiwan Semiconductor Manufacturing Company (TSMC, 2330) is set to hold its annual shareholders' meeting on June 3rd. The recently released annual report provides a comprehensive overview of the company's overseas operations' financial performance. The report highlights significant contrasts in profitability across different regions.

The most notable figure is the loss incurred by the new factory in Arizona, USA, which recorded a loss of nearly NT$14.3 billion last year. This represents the most significant financial burden among TSMC's overseas operations. Other locations also experienced losses, including Japan and Europe, with losses exceeding NT$4.3 billion and over NT$500 million, respectively. In stark contrast, the company's operations in mainland China, particularly the Nanjing factory, achieved strong financial performance, generating profits of nearly NT$26 billion last year.

Following TSMC's commitment to "Made in America," the Arizona subsidiary's financial results have been revealed in the 2021, 2022, and 2023 annual reports. The subsidiary incurred losses of NT$4.81 billion, NT$9.43 billion, and NT$10.924 billion, respectively. Last year's loss of NT$14.298 billion represents the largest loss since the establishment of the US factory. This implies that, before the mass production started at the TSMC Arizona plant in the fourth quarter of last year, the cumulative loss over the past four years has exceeded NT$39.4 billion.