TSMC Announces "Factory Construction in Arizona, USA... Partnership with Authorities" (Comprehensive)

[Image source=Reuters Yonhap News]

[Asia Economy Beijing=Special Correspondent Sunmi Park, Reporter Changhwan Lee] Taiwan's TSMC, the world's number one semiconductor foundry (contract manufacturing) company, announced plans to invest $12 billion to build a semiconductor factory in the United States.

In a statement released on the 15th, TSMC announced it will invest approximately $12 billion (about 14.7 trillion KRW) to construct a semiconductor plant in Arizona. TSMC stated that the Arizona facility will produce advanced 5nm (1nm = one billionth of a meter) chips and is expected to create 1,600 jobs. The new factory will begin construction in 2021 and plans to start mass production in 2024. It will have the capacity to process 20,000 silicon wafers per month, with each wafer containing thousands of individual chips.

TSMC said, "This project represents a strong partnership with the U.S. administration" and added, "It is a very important and strategic project for the U.S. semiconductor ecosystem, enabling leading U.S. companies to manufacture cutting-edge semiconductor products."

Earlier, The Wall Street Journal (WSJ) reported, citing sources, that TSMC was expected to announce plans as early as the 15th to build an advanced system semiconductor foundry in Arizona. Sources indicated that the U.S. State Department, Commerce Department, and other government agencies are all involved in the TSMC factory construction, and semiconductor production could begin as early as the end of 2023.

If TSMC builds a factory in the U.S., it will be the second production base in the country following Washington State. This aligns with the Trump administration's strategy to promote semiconductor self-sufficiency and reduce dependence on Asian regions such as South Korea, Taiwan, and China. Recently, amid concerns over supply chain disruptions of semiconductors?key components of advanced industries?triggered by the COVID-19 pandemic, the U.S. has been discussing system semiconductor factory construction with companies like TSMC, Intel, and Samsung. TSMC holds more than half of the global foundry market share and counts many U.S. companies such as Apple, Qualcomm, and Nvidia as customers. Huawei is a major customer in China.

Samsung Electronics is also considering expanding semiconductor production in the U.S. in the mid to long term. Currently, it operates a foundry plant in Austin, Texas. The U.S. government wants Samsung to expand the Austin plant, hire more personnel, and increase production. However, Samsung has already invested about 20 trillion KRW in the Austin plant, making immediate additional investment difficult. A Samsung official said, "We have continuously invested in semiconductors in the U.S.," adding, "Decisions must be made considering various factors such as semiconductor supply and demand, outlook, and market conditions."

Intel, which has semiconductor factories worldwide including in the U.S., Europe, and China, is also considering expanding its U.S. factories. Intel is reportedly prioritizing expanding U.S. plants over overseas ones in line with the U.S. government's semiconductor self-sufficiency push and reshoring policies.

TSMC's U.S. factory construction is expected to serve as a favorable "card" for the Trump administration ahead of the presidential election. Generally, large-scale semiconductor factories bring employment effects involving thousands of jobs.

The construction of a U.S. factory by a Taiwanese company could also be used as a card to pressure China. In an interview with Fox Business on the same day, President Trump said, "There is a lot we can do with China. We could cut off all relations. If we cut off relations, we could save $500 billion," adding, "I have a good relationship with Chinese President Xi Jinping, but right now I don't want to talk."

This content was produced with the assistance of AI translation services.