TSMC seeks more U.S. support for new $12 bil. semiconductor plant in Arizona

15, May. 2020

This undated photo shows a scene inside an TSMC’s 12-inch fab. (Photo courtesy of TSMC).
This undated photo shows a scene inside an TSMC’s 12-inch fab. (Photo courtesy of TSMC).

TAIPEI, NNA - Taiwan Semiconductor Manufacturing Co. (TSMC), a global leader in chip making, will cough up an eye-watering $12 billion to build a huge plant in Arizona, its second in the United States.

On Friday, the semiconductor giant said the project, which would be launched "with the mutual understanding and commitment to support from the U.S. federal government and the State of Arizona" would need significant investments to ensure its success.

The move comes after the Trump administration repeated warned about the security threat posed by having too much of the world’s electronics made outside of the United States.

In TSMC's media statement, it also said the plant will use the Taiwan company's advanced 5-nanometer technology for wafer fabrication to churn out 20,000 wafers each month when ready in 2024.

It will employ over 1,600 high-tech professionals, and possibly, indirectly create thousands of jobs in the semiconductor ecosystem, according to the statement.

"This U.S. facility not only enables us to better support our customers and partners, it also gives us more opportunities to attract global talents," it said.

TSMC highlighted how its new plant would be 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."

Acknowledging that such a big project would require significant capital and technology investments, TSMC said it "welcomes continued strong partnership with the U.S. administration and the State of Arizona.

It said, "The strong investment climate in the United States, and its talented workforce make this and future investments in the U.S. attractive to TSMC. U.S. adoption of forward-looking investment policies to enable a globally competitive environment for a leading edge semiconductor technology operation in the U.S. will be crucial to the success of this project."

TSMC believes U.S. support and investments for the new plant and other future projects by TSMC and its supply chain companies would ensure their success.

TSMC currently operates a plant in Washington and design centers in Texas and California. It also has plants in China.

The world's largest contract chipmaker has launched the production of wafers using the cutting-edge 5-nanometer process at a plant in southern city of Tainan.

Analysts have predicted 5-nanometer process will push TSMC’s revenue growth and contribute more than NT$100 billion ($3.3 billion) this year, according to a Central News Agency report.

TSMC has forecast a flat second quarter with an estimated revenue of between $10.1 billion and $10.4 billion, counting on 5G deployment and demand for high-performance computing-related products. It recorded earnings of $10.31 billion for the first quarter, a 45.2 percent jump over the previous year, helped mostly by smartphone chips.

TSMC had the second largest wafer capacity in the world at the end of 2019, while it continued to reign as the world's largest contract chipmaker, according to U.S. based market advisory firm IC Insights.