TSMC Set To "Double Down" And Vastly Increase U.S. Semi Production Investment In Arizona

At the beginning of May, we noted that Taiwan Semiconductor was considering bolstering its production in the U.S., and that President Biden's Commerce Secretary was urging more domestic production. Now, it looks like TSMC could be within striking distance of a serious U.S. expansion. 

The chipmaking giant is "weighing plans to pump tens of billions of dollars more into cutting-edge chip factories in the U.S. state of Arizona than it had previously disclosed", a Reuters exclusive revealed Friday morning.

The company had already said it was going to invest $10 billion to $12 billion in Arizona. Now, the company is mulling a more advanced 3 nanometer plant that could cost between $23 billion and $25 billion, sources said. The changes would come over the next 10 to 15 years, as the company builds out its Phoenix campus, the report notes.

The move would put TSMC in direct competition with Intel and Samsung for subsidies from the U.S. government. President Joe Biden has proposed $50 billion in funding for domestic chip manufacturing - a proposal the Senate could act on as soon as this week. Intel has also committed to two new fabs in Arizona and Samsung is planning a $17 billion factory in Austin, Texas. 

TSMC CEO C.C. Wei said on a call last month: "But in fact, we have acquired 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."

TSMC has also said that talks in Europe regarding expansion have gone "very poorly", increasing the likelihood that the chip giant will be focused more on the U.S.

There are no plans for a plant in Europe, a TSMC spokesperson said. 

TSMC has, however, been poaching talent from companies like Intel. The company recently hired 25 year Intel veteran Benjamin Miller to head up its human resources in Arizona. TSMC chairman and founder Morris Chang has warned about a thin talent pool in the U.S., stating: "In the United States, the level of professional dedication is no match to that in Taiwan, at least for engineers."

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