U.S. push to boost local production of semiconductor has got a reprieve following an announcement by Taiwan Semiconductor Manufacturing Co. (TSMC) on Tuesday to increase its investment in the North American country.
TSMC said it will more than triple its investment in the U.S. to $40 billion and bring the world’s most advanced chip production technology to the country by 2026.
The tech industry was heavily impacted by global chip shortage following the outbreak of covid-19. The United States has been pushing for production of semiconductor companies on its soil. Thus, TSMC’s announcement is a glad tiding to America’s quest to dominate the chip industry by far.
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The world’s biggest contract chipmaker, said it will increase its investment in Arizona, where it is currently building a $12 billion chip facility, to $40 billion in order to build a second, even more advanced plant there, Nikkei Asia reports.
The announcement came ahead of an equipment installation ceremony at the first facility scheduled for later in the day, which U.S. President Joe Biden and numerous tech industry executives were expected to attend.
The additional facility will begin operation by 2026 and will be the first plant in the U.S. to make 3-nanometer chips, the most advanced currently available, a White House official said. In line with the expansion, TSMC will increase its workforce in Arizona to 4,500, from an initial plan of 1,600, the company said.
Nanometer size refers to the distance between transistors on a chip — the smaller the number, generally speaking, the more powerful the chip. As the “brains” of electronic devices, such chips are vital for everything from smartphones and autonomous vehicles to supercomputers and AI technologies.
TSMC’s first plant, which is slated to begin production in 2024, will produce 4-nm chips of the kind currently used for iPhone 14 Pro processors. Once that plant and the 3-nm facility are operating at full capacity, TSMC’s total output in Arizona will be 60,000 wafers per month, triple its original plan of 20,000.
“When complete, TSMC Arizona will be the greenest semiconductor manufacturing facility in the United States producing the most advanced semiconductor process technology in the country, enabling next generation high-performance and low-power computing products for years to come,” TSMC Chairman Mark Liu said in a statement released Tuesday. “We are thankful for the continual collaboration that has brought us here and are pleased to work with our partners in the United States to serve as a base for semiconductor innovation.”
Apple and chipmakers AMD and Nvidia will be among the first customers buying chips from TSMC’s Arizona plant, according to an announcement by the company and the White House, confirming an earlier Nikkei Asia report. AMD told Nikkei Asia that it “looks forward to having its most advanced chip products built in TSMC’s Arizona fabs.” Nvidia’s CEO Jensen Huang said in a statement that “bringing TSMC’s investment to the United States is a masterstroke and a game-changing development for the industry.”
Biden’s decision to attend the equipment installation ceremony on Tuesday underscores the importance of TSMC to Washington’s chip ambitions. He is set to be joined by a who’s who of the tech industry, including CEOs from companies such as Apple, Nvidia and AMD as well as top chipmaking tool companies Applied Materials and Lam Research plus other chip-related players such as Entegris, Synopsys and Arm.
TSMC founder Morris Chang, Chairman Mark Liu and CEO C.C. Wei will all attend the event.
The companies represented at the ceremony are worth at least $4 trillion, making the event the most important gathering in the semiconductor industry in the post-pandemic era.
In the chip industry, a tool move-in event signals that the installation of essential equipment has begun and is a significant milestone for a chipmaking facility to become operational.
TSMC’s announcement comes as Washington is pushing hard to onshore vital production of semiconductors. In addition to their economic importance, chips are also seen as vital to national security — a sentiment reflected in the latest round of export controls Washington imposed on China in an attempt to curb its semiconductor advancement.
Their importance was further brought home by a global chip shortage sparked by the pandemic and supply chain disruptions, hitting a range of industries.
Rising political tensions between China and Taiwan, the self-ruled democratic island where TSMC is based and which Beijing views as part of its territory, have further accelerated Washington’s push to diversify chip production.
Currently, the majority of the world’s cutting-edge chips are built in Asia by TSMC and Samsung Electronics of South Korea.
The U.S. is hoping to change this by offering incentives for companies to build chip capacity on American soil. In July, lawmakers passed the $52.7 billion CHIPS and Science Act package to boost the domestic semiconductor industry, though allocation of the funds will not be decided until next year, a White House official said.
In addition to TSMC’s expanded investment plans, Samsung is building a $17 billion plant in Texas, while top U.S. chipmaker Intel is spending at least $40 billion to build chip plants in Arizona and Ohio.
Currently, only TSMC, Samsung and Intel are building or attempting to build chips as advanced as 3-nm, and all aim to put even more advanced 2-nm chips into production by 2025.
The world’s biggest contract chip maker, TSMC, has more than tripled its investment plans for Arizona. The Tapei-based company has agreed to build a second semiconductor factory for chips in the state with 3-nanometer technology — equivalent to the smallest and speediest chips available — for customers such as Apple. TSMC’s total investment, bolstered by U.S. incentives under the CHIP bill passed this year, will be $40 billion, up from $12 billion. (LinkedIn News)