The US chip supply chain is still a work in progress when it comes to self-reliance. As demand in the AI market skyrockets, TSMC’s Arizona-made chips are being flown back to Taiwan for packaging. This isn’t because of preference, but due to a lack of domestic packaging services to handle the volume and specific requirements.
Air cargo services are booming, particularly as TSMC navigates this logistical challenge. According to a report from Taiwan Economic Daily, TSMC is compelled to send fully-prepared wafers to Taiwan for packaging, which is crucial for making these chips ready for AI server manufacturers like NVIDIA. Setting up packaging facilities in the US isn’t yet feasible, making air transport the most convenient solution for now.
Eva Air, a major player in the air logistics sector, is experiencing a surge in demand following the buzz around TSMC’s US endeavors. Initially, orders dipped in response to tariffs introduced by President Trump, but these quickly rebounded after a tariff pause. Now, with TSMC’s facilities in Taiwan facing a backlog, Arizona has stepped up to manage some of this demand.
Despite the setbacks, the expansion of the US chip supply chain is promising. TSMC’s $165 billion investment plan includes advanced packaging facilities, although these developments are still in the pipeline. The current solution of flying wafers back to Taiwan adds extra cost, but neither TSMC nor its partners seem deterred, given the booming AI market and the substantial orders flooding in for NVIDIA’s AI servers.
Looking ahead, the growth trajectory is set to continue. By 2032, the US aims to meet over 50% of its domestic chip demand, indicating positive momentum in achieving chip self-sufficiency. With plans to advance production to 1.6nm (A16) in the US, the future looks promising for the American chip industry.
