TSMC’s big Arizona adventure was supposed to be a landmark moment for the US chip industry, although it now looks more like an expensive lesson in why fabs prefer cheaper postcodes.

Taiwanese outlet Ctee claims the company’s US arm saw profits crater from NT$4.232 billion [€117 million] to NT$41 million [€1.13 million] in a single quarter.

The firm jumped into US manufacturing because its biggest customers demanded it and because the Trump administration turned “make it in America” into a daily sermon. The big idea was that it would help give the US a supply chain not held hostage by geopolitics, although it turns out that freedom comes with a hefty surcharge.

Ctee says the second Arizona fab is heading for even thinner margins because TSMC is trying to stand up 3nm lines, which need machinery so pricey you need to sit down before reading the quote.

The first fab looked like a roaring success because it churned out mature nodes while avoiding the bleeding edge. The AI boom then kicked the doors in, and customers want the best kit everywhere, which means TSMC must burn cash to keep them happy.

Life in the US is not cheap. Labour and construction gobble money, and the talent still largely arrives from Taiwan because America’s semiconductor workforce vanished the moment Troubled Chipzilla stopped being the only game in town. These foreign workers always run the risk of being pulled over by ICE and dragged off to a crocodile-infested gulag where they are never heard of again.

When you add the costs of pushing toward 3nm and even fancier nodes, the profitability of TSMC’s US operations will stay well below its other regions no matter how many flags get waved at ribbon-cuttings.