The struggles of TSMC’s U.S. operations are sending ripples through the global semiconductor industry, raising doubts about the viability of building advanced fabs outside Asia — and putting Samsung Electronics in a tight spot as it nears completion of its own plant in Texas.
TSMC remains deep in the red at its Arizona plant, despite having launched operations there, due to elevated labor costs and ongoing infrastructure investments. The company has reported cumulative losses of NT$39.45 billion ($1.22 billion) at the site over the past four years. On top of that, CEO C.C. Wei announced a new $100 billion investment plan in March, following a meeting with U.S. President Donald Trump — highlighting how geopolitical pressure is pushing firms to double down on U.S. operations.
The losses extend to TSMC’s other international sites as well. In Japan, its subsidiary JASM posted a record loss of NT$4.38 billion after launching production of 12-nanometer and older chips in Kumamoto in late 2024. In Germany, its new Dresden facility lost NT$500 million.
Samsung now finds itself in a similar bind. With no major clients yet secured for the Taylor site, analysts warn that the company could face immediate operating losses once the facility comes online — worsened by significantly higher labor and manufacturing costs in the U.S. compared to South Korea, where its domestic foundry business is already running at a loss.
Those financial risks may be contributing to Samsung’s cautious rollout. Although the Taylor facility is reportedly 99.6% complete, the company has delayed importing key equipment — a move attributed to sluggish demand and macroeconomic uncertainty that could limit initial sales.
“Typically, fabs begin importing equipment within three to six months of construction completion,” said a person familiar with the matter. “Samsung has pushed back those steps, likely increasing the risk of having to pay higher tariffs. On top of that, staffing the plant with qualified engineers from Korea will be both logistically and financially burdensome.”
That risk looms especially over advanced tools like ASML’s extreme ultraviolet (EUV) lithography machines, which can cost up to 500 billion won ($364 million) each. Tariffs alone could add tens of millions of dollars to the final price per unit.
Meanwhile, Samsung’s foundry division continues to bleed money. After posting a 2 trillion won operating loss in 2023, the unit is estimated to have doubled that deficit to 4 trillion won last year. Analysts expect a further 3 trillion won shortfall in 2025.
With the U.S. plant posing even greater cost and operational risks, industry insiders say Samsung executives are treading carefully. Since Jeon Young-hyun took the helm of the semiconductor division, the company has already slowed capital spending. At its flagship Pyeongtaek campus in South Korea, the rollout of new equipment for the P4 production line has also been pushed back — a sign of a broader pullback in the face of mounting losses.
