Taiwanese chip behemoth TSMC is gearing up to build several additional production facilities in Arizona in order to satisfy U.S. demand, say anonymous sources familiar with the matter.
Taiwan Semiconductor Manufacturing Co. Ltd., the largest chipmaker in the world, already unveiled plans in May of 2020 to build a $12 billion USD factory in Arizona to produce high-tech chips on American soil.
The announcement came after former President Donald Trump’s administration pushed to create a renaissance in American manufacturing and a shift away from reliance on made-in-China goods.
The project’s construction began this year and is expected to result in a single fully operational production plant by 2024. The main branch of the Arizona facility is projected to build a modest 20,000 silicon wafers per month using the firm’s most sophisticated 5 nanometer technology. Each wafer contains thousands of individual chips.
TSMC currently manufactures most of its chips in Taiwan, but has older production facilities in both China and Washington.
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Three anonymous sources told Reuters that as many as five additional fabrication plants are in the works at the Arizona site.
Last month, TSMC’s board announced plans to invest $100 billion over the next three years to expand production capacity, compelled by an unprecedented shortage of chips rippling across the global auto and electronic markets.
One of Reuter’s sources told the outlet six fabrication facilities would be built at the direct bequest of the United States. The sources could not give a time frame for when construction would begin or could be completed, however.
U.S. Secretary of Commerce Gina Raimondo said during an appearance at an Americas Society event on May 4 that the U.S. is on the hunt to on-shore domestic production in a number of sectors in a bid to move away from reliance on Chinese Communist Party-made goods.
She added that her administration is pressuring TSMC to allot more supply to American automakers, who are struggling with a major chip shortage, “We’re working hard to see if we can get the Taiwanese and TSMC, which is a big company there, to prioritize the needs of our auto companies since there’s so many American jobs on the line,” she said.
Raimondo said currently the U.S. is making “zero percent of leading-edge chips in the United States,” and that “that’s a problem.”
“We ought to be making 30 percent because that matches our demand…It is definitely the case that we have to reshore much of our supply chain,” she said.
Another of Reuter’s sources said TSMC bought plenty of land for additional facilities when they purchased the land for the main plant. A third source attested TSMC told them six additional facilities would be built over the next three years.
During an April earnings call, TSMC CEO CC Wei only confirmed the known production plant. However, he did confirm his company had purchased “a large piece of land in Arizona to provide flexibility.”
“So further expansion is possible, but we will ramp up to Phase 1 first, then based on the operation efficiency and cost economics and also the customers’ demand, to decide what the next steps we are going to do.”
“Once there is any official decision, we will disclose it accordingly,” added Wei.
