Taiwan’s TSCM, the world’s largest semiconductor manufacturer, which provides computer chip making facilities for chip makers all over the world, has agreed to open a $12 billion fab (production centre) in the US, amid sustained US pressure to bring silicon supply chains closer to home.
This facility, which will be built in Arizona, will use TSMC’s new 5-nanometer technology for semiconductor wafer fabrication, have a 20,000 semiconductor wafer per month capacity, and create over 1,600 jobs directly, TSCM said.
China and Taiwan are central chip production hubs, particularly for so-called “fabless” semiconductor design companies, although the US dominates actual semiconductor market share, with 48 percent of the $412 billion market. US policy makers have grown increasingly concerned not just about supply chain risk, but national security resulting from chip production in China.
US Secretary of State Mike Pompeo welcomed the move as bolstering US national security “at a time when China is trying dominate cutting edge tech”.
The U.S. welcomes TSMC’s intention to invest $12B in the most advanced 5-nanometer semiconductor fabrication foundry in the world. This deal bolsters U.S. national security at a time when China is trying to dominate cutting-edge tech and control critical industries.
US officials have repeatedly urged TSMC and Taiwanese policy makers to restrict chip sales to China, with one official in November 2019 reportedly telling Taiwanese diplomats in Washington that “chips made by TSMC for Huawei were going straight into Chinese missiles pointing at Taiwan — a statement intended as a ‘metaphor’ illustrating the risks of supplying China.
The Taiwanese firm noted that the huge capex investment will require supportive investment policies. Executives have previously warned that US foundries could struggle to be cost-competitive. The company said today that “US adoption of forward-looking investment policies to enable a globally competitive environment for a leading edge semiconductor technology operation in the US” will be crucial to the success of this project.”
Construction is slated to start next year, with production targeted to begin in 2024. (TSMC produced 10,761 different products using 272 different process technologies to serve hundreds of customers with the world’s largest logic capacity of >12 million 12″-equivalent wafers in 2019, the company says).
“This project is of critical, strategic importance to a vibrant and competitive U.S. semiconductor ecosystem that enables leading U.S. companies to fabricate their cutting-edge semiconductor products within the United States and benefit from the proximity of a world-class semiconductor foundry and ecosystem,” TSMC said in a statement today, noting that the project will require “significant capital and technology investments from TSMC.”
In the United States, TSMC currently operates a fab in Camas, Washington and design centers in both Austin, Texas and San Jose, California. The Arizona facility would be TSMC’s second manufacturing site in the United States.