TSMC plans to double down on US chip factories

Taiwan Semiconductor Manufacturing Co is weighing plans to pump tens of billions of {dollars} extra into cutting-edge chip factories within the U.S. state of Arizona than it had beforehand disclosed, however is cool on prospects for a complicated European plant, folks acquainted with the matter advised Reuters.

TSMC is the world’s most superior chip-maker, and its funding plans are being carefully watched amid a world chip scarcity and new initiatives within the U.S. and Europe to subsidize semiconductor manufacturing. TSMC introduced final yr that it will make investments $10 billion to $12 billion to construct a chip manufacturing unit in Phoenix.

Reuters this month reported that the beforehand disclosed manufacturing unit may very well be the primary of as much as six deliberate vegetation on the web site. Now, firm officers are debating whether or not the subsequent plant ought to be a extra superior facility that may make chips with so-called 3-nanometer chipmaking expertise in comparison with the slower, less-efficient 5-nanometer expertise used for the primary manufacturing unit.

The extra superior 3-nanometer plant might price $23 billion to $25 billion, one particular person acquainted with the matter advised Reuters. Particulars of TSMC’s plans for the extra factories on the Arizona web site haven’t been beforehand reported.

Officers have additionally sketched out plans for TSMC to make next-generation 2-nanometer and smaller chips because the Phoenix campus is constructed out over the subsequent 10 to fifteen years, the particular person stated.

In constructing the vegetation, TSMC is more likely to compete in opposition to Intel Corp and Samsung Electronics Co Ltd for subsidies from the U.S. authorities. President Joe Biden has referred to as for $50 billion in funding to assist home chip manufacturing, and the U.S. Senate might take motion on that as early as this week.

Some authorities officers fear that subsidies for TSMC might assist Taiwan, the place the corporate would possible proceed to conduct analysis and improvement, greater than the U.S. However the U.S. subsidy plan doesn’t exclude overseas companies.

Authorities and trade officers say a powerful home chip-making sector is crucial for the financial system and nationwide safety. Though U.S. chip companies resembling Qualcomm Inc and Nvidia Corp dominate their markets globally, most of their chips are manufactured in Asia.

Intel has additionally dedicated to 2 extra new fabrication vegetation, or fabs, in Arizona, whereas Samsung is planning a $17 billion manufacturing unit adjoining to an present facility in Austin, Texas.

A debate over learn how to enhance chip-making can also be taking part in out within the European Union. Intel has proven severe curiosity in these efforts, with chief government Pat Gelsinger pitching a subsidy that might quantity to $9 billion for a proposed “Eurofab” throughout a visit to Brussels final month.

EU trade commissioner Thierry Breton, who has championed the Eurofab concept, additionally spoke with TSMC’s Europe president, Maria Marced, final month. Though Breton publicly referred to as the TSMC speak a “good alternate,” a second particular person acquainted with the matter stated the TSMC talks in Europe have gone “very poorly.”

A TSMC spokeswoman stated that the corporate has not dominated out any prospects, however that there are not any plans for a plant in Europe.

European chip and auto corporations, for his or her half, are largely lined up in opposition to the concept. They would favor subsidies for the older-generation chips which are closely utilized by automotive producers and are briefly provide.

A lot of TSMC’s most profitable prospects, resembling Apple, are U.S.-based, whereas its European buyer base is made up of largely of automakers shopping for less-advanced chips. Within the first quarter, purchasers primarily based in Europe and the Center East solely accounted for six% of TSMC’s income, far outpaced by the by 67% of gross sales from North America and 17% from Asia Pacific.

Sources stated TSMC has not dominated out constructing an older-generation chip plant in Europe to serve auto prospects.


TSMC this yr employed Benjamin Miller, a 25-year Intel veteran, as its head of human assets in Arizona. The corporate says that it has employed 250 engineers there and that about 100 of them, together with their households, have been despatched to Tainan, Taiwan, the place they are going to full a 12- to 18-month coaching program earlier than returning to Arizona.

TSMC declined to touch upon particular particulars of its Arizona plans, however its Chief Government CC Wei final month stated that “additional growth is feasible” after an preliminary part. He stated the corporate would gauge effectivity on the web site and buyer demand and determine on the subsequent steps.

TSMC chairman and founder Morris Chang warned final month of upper working prices and a skinny expertise pool for the U.S. plans in a uncommon public speech attended by Wei and chairman Mark Liu.

“In the US, the extent {of professional} dedication isn’t any match to that in Taiwan, a minimum of for engineers,” Chang stated. He warned that “short-term subsidy cannot make up for long-term operational drawback.”

TSMC’s first Arizona manufacturing unit shall be comparatively small, with a projected output of 20,000 wafers – 12-inch silicon discs that may every comprise 1000’s of chips – per 30 days. Against this, TSMC’s “gigafabs” in Taiwan can produce 100,000 wafers per 30 days.

However TSMC leaders are taking a protracted view, beginning with mature expertise and ramping up quantity whereas regularly introducing essentially the most superior processes, a 3rd particular person acquainted with the matter stated. Just like the others, the particular person declined to be recognized due to the sensitivity of the matter.

“You simply don’t go into Phoenix, 10,000 miles away, and begin fabricating on the vanguard,” the particular person stated. Refile: This story provides dropped ‘the’ and deletes repeated phrases in paragraph 3, provides dropped ‘over’ in paragraph 5, adjustments ‘subsides’ to ‘subsidies’ in paragraph 6, removes further comma in paragraph 18, fixes typo in dateline.

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