TSMC Announces Intention to Build $12B Advanced Semiconductor Fab in the US

May 29, 2020 by Shannon Cuthrell

Taiwan Semiconductor Manufacturing Company (TSMC) recently announced its intention to build a $12 billion advanced semiconductor fabrication facility in Arizona.

The chip-making giant says the new facility aims to produce 20,000 semiconductor wafers monthly and will employ more than 1,600 high-tech workers, along with thousands of other employees. 

The fab will use TSMC’s 5-nm process technology, which is currently utilized to manufacture Apple’s A14 processor for the iPhone 12. TSMC says construction will begin in 2021, targeting the start of production in 2024. 

While TSMC has design centers in Austin and San Jose, the new wafer fab will be the company’s second manufacturing site in the U.S. TSMC’s WaferTech subsidiary, established in 1996, is based in Camas, Washington. The 260-acre campus is home to TSMC’s 8-inch fab, one of six facilities of its kind. TSMC operates four 8-inch fabs in Taiwan and one in China. 

In its announcement, TSMC cited the U.S.’s strong investment climate and advanced workforce as factors motivating expansion. The press release said the new factory will be built with the “mutual understanding and commitment to support from the U.S. federal government and the State of Arizona.” 

However, the announcement did not disclose any information about an incentive deal. The U.S. Department of Commerce released a statement praising TSMC’s commitment, but it also remained silent on the details behind the move. 

Establishing an advanced semiconductor fab in the U.S. would require a substantial amount of subsidies, TSMC Chairman Mark Liu told The New York Times last fall, as the company was in talks with the Department of Commerce about opening a new factory. 

TSMC’s announcement comes during an uncertain time for the semiconductor market, with sales down and supply chains disrupted due to the coronavirus pandemic. Many power electronics companies are grappling with the pressure to move their manufacturing presence back to the U.S. Even before COVID-19, TSMC was facing increased pressure from the American government to relocate the factories used for defense materials to the U.S.