TSMC(US:TSM) Huan Qiu Wang Zi Xun·2026-01-05 23:05Core Viewpoint - TSMC's expansion in the U.S. is significantly impacting its profitability due to high production costs, leading to a stark contrast in profit margins between its U.S. and Taiwan facilities [1][2]. Cost Comparison - The labor cost per wafer at TSMC's Taiwan facility is approximately $1,800, while in the U.S., it reaches $3,600, effectively doubling the cost [1]. - The depreciation cost per wafer is even more pronounced, with Taiwan's cost at about $1,500 compared to $7,289 in the U.S., making the U.S. cost over four times higher [1]. - The gross margin for a wafer produced in Taiwan is around 62%, whereas in the U.S., it plummets to about 8%, which is roughly one-eighth of the Taiwan margin [1]. Production Capacity and Utilization - TSMC's U.S. facilities have lower production capacity and utilization rates, producing only about one-fourth of the output compared to its Taiwan plants, which increases the per-wafer cost significantly [1]. Labor Challenges - TSMC faces challenges in labor costs, with two options for staffing its U.S. facilities: hiring local employees or sending Taiwanese engineers, with the latter being more cost-effective [2]. - Cultural differences in work practices also pose challenges, as highlighted by TSMC's founder, who noted that response times to equipment failures differ significantly between the U.S. and Taiwan [2]. Long-term Strategy and Investment - Despite the high costs, TSMC views its U.S. expansion as a long-term strategy, planning to invest up to $300 billion in the U.S. supply chain, which is perceived as a "political investment" [2]. - The rising operational costs are becoming a significant sustainability challenge for TSMC's overseas expansion, impacting its ability to balance profit margins with customer demands in the U.S. [2].