TSMC Will Open $3.5 Billion Semiconductor Fab in Arizona

Taiwan Semiconductor Manufacturing Co, known more commonly as TSMC, has announced a major expansion in an unexpected place: the USA. TSMC says it will build a new semiconductor fab in Arizona. The project should get off the ground next year with funding from TSMC, the state of Arizona, and the federal government. 

TSMC says it will found a wholly owned subsidiary in the US with $3.5 billion in resources. While building will get underway next year, jobs at the site will be mostly limited to construction until the facility goes into production in 2024. In all, TSMC expects to spend $12 billion on the Arizona fab between 2021 and 2029. Eventually, the fab will employ about 1,600 people, and it could compete for those employees with Intel, which has several fabs in Arizona. That’s good news for skilled workers in the state, as well as for TSMC. Intel’s presence means it won’t have to build a supply chain from scratch — there are already numerous local suppliers with whom TSMC can partner. 

That’s just an estimate, of course. Delays could push the high-volume launch further out. TSMC hopes to be churning out 20,000 wafers per month in 2024 with a 5nm process. That’s the current top-of-the-line, but the company’s planned 4nm process could be available by the time the fab is done. Still, 5nm chips are happening now, and we’re talking about 2024. 

Inside a TSMC foundry facility. The yellow light is required to ensure safe wafer processing.

TSMC expects it will have a 3nm process up and running by late 2022. However, it plans to keep that production in Taiwan rather than roll it out to the US subsidiary. Most of the company’s high-profile customers such as Apple, Samsung, and Qualcomm want TSMC’s most advanced process to make the fastest and most efficient chips possible. 20,000 wafers sounds like a lot, but it wouldn’t be enough to supply TSMC’s high-volume customers, even just those in America. That’s why it relies on “gigafabs” in Taiwan to manufacture the latest (and most popular) semiconductor designs. Come 2024, this fab might be churning out the kind of chips you see in embedded smart devices and budget phones. 

Getting a foothold in the US is important for TSMC as it aims to compete with GlobalFoundries. With a US-based factory, the company might be able to bid on US government and military contracts that would require careful oversight and US manufacturing. That’s all still a long way off — we expect to hear more details about the Arizona facility early next year, but then news should dry up until it’s ready to come online in 2024.

Top photo credit: Laura Ockel/ Unsplash

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