TSMC's Factory Performance Varies in Different Regions

According to reports, TSMC's 2024 annual report for its shareholders' meeting recently revealed significant differences in the operating conditions of its factories in different regions.

Specifically, TSMC's new factory in Arizona, USA, incurred a loss of nearly NT$14.3 billion (about 3.2 billion RMB) last year. It was reported that this marked the largest loss since the establishment of TSMC's US factory.

In contrast, TSMC's Nanjing factory in the Chinese mainland made a profit of nearly NT$26 billion (about 5.8 billion RMB) last year, showing a huge gap compared with the Arizona factory.

It was reported that in the annual reports for the shareholders' meetings from 2021 to 2023, TSMC had successively disclosed that the new Arizona factory suffered losses of NT$4.81 billion, NT$9.43 billion, and NT$10.924 billion respectively. Including last year, the factory has accumulated losses of over NT$39.4 billion (about 8.85 billion RMB) in the past four years.

TSMC's factories in Japan and Europe also performed poorly. The factory in Japan had a loss of more than NT$4.3 billion (about 1 billion RMB), and the one in Europe lost more than NT$500 million (about 110 million RMB).

In sharp contrast, TSMC's Nanjing factory in the Chinese mainland made a profit of nearly NT$26 billion last year, better than the profit of NT$21.755 billion in 2023 and NT$20.486 billion in 2022. Statistics show that the Nanjing factory has stably made a profit of over NT$20 billion in the past three years, significantly better than the profit of NT$12.283 billion in 2021.

At the beginning of last month, it was announced that TSMC would make an additional investment of at least $100 billion in the United States. This investment was described as "the largest single - item foreign direct investment in US history".

At that time, there were discussions. Some thought this move could avoid tariff threats and even lead to "friendly treatment" for a certain region. However, a so - called "reciprocal tariff" policy showed that a high tariff of 32% was imposed on a certain region, only two percentage points lower than that on the Chinese mainland.

Now, in addition to the three wafer fabs originally planned to be built in Arizona, the new investment includes building three more new wafer fabs, two packaging plants, and a research and development center. It was thought that TSMC's increased investment in the United States would lead to higher costs, lower efficiency, and a decrease in the overall gross profit margin.

It was also reported that in a speech, it was claimed that a certain person told TSMC that if it didn't set up factories in the United States, it would be subject to a "100% tariff".

It was pointed out that TSMC has long become a tool for a certain political stance, and it is only a matter of time before the semiconductor industry in a certain area is sacrificed.