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In a big win for US semiconductor ambitions, TSMC has said it is more than tripling its investment in the US to $40 bn from the previously announced $12 bn, expanding the scope of advanced chip manufacturing in the US. The TSMC Arizona plant, which is currently under construction, will see a second fab being opened which will produce even more advanced chips.
The Asian chipmaker had previously said it was considering a second fab in Arizona. The current $12 bn investment is to produce 5-nanometre and 4-nanometre chips, whereas the additional investment for phase two of the project is for manufacturing the more advanced 3-nanometre chips.
Expanding TSMC Arizona plant
“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.
Phase one of the TSMC Arizona facility will become operational by 2024. While initial plans included only 5-nm chips, 4-nm chip production will begin at the facility in 2024 as Apple, Nvidia and AMD have asked TSMC to make the more sophisticated semiconductors at the Arizona plant.
Phase two of the TSMC Arizona facility will begin operations by 2026 and will be the first such manufacturing plant in the US to make 3-nm chips. The company said it will increase its workforce at the site from the previously planned 1,600 to 4,500 considering the higher investment.
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.”
The larger facility would also mean TSMC would produce more wafers per month in Arizona. Previous estimations stated that the company had planned to produce 20,000 wafers per month, but under the new plan, this count is likely to double.
The news comes as US President Joe Biden, TSMC founder Morris Chang, Chairman Mark Liu and CEO CC Wei are scheduled to attend the equipment installation ceremony on December 6. Apple CEO Tim Cook and other CEOs are also expected to join the event.
While this might come as good news to US firms and the country’s semiconductor industry in general, there are additional costs involved in producing high-end chips outside of Taiwan.
TSMC founder Morris Chang had said that manufacturing 3-nm chips in the US is 50% more expensive than in Taiwan. Patrick Chen, head of research at CLSA in Taiwan, told Financial Times, “If they fully ramp Arizona, the proportion of US-made chips they could provide to customers would be maybe 15% of the total.”
President Biden’s plan to subsidize semiconductor manufacturing in the US, and the subsequent sanctions on China, have pushed companies like TSMC, Samsung and others to explore building chip capacity on American soil.
