UPDATED 19:58 EDT / MAY 14 2020


Report: TSMC to build new $10B computer chip factory in the U.S.

Computer chipmaker Taiwan Semiconductor Manufacturing Co. is planning to build its first major factory in the U.S., according to a report in the Wall Street Journal.

The new facility would be based in Arizona and make five-nanometer transistor chips that are among the smallest, fastest and most power-efficient currently available.

The Journal said TSMC’s plans could be officially announced as early as Friday. The plans come at a time when President Donald Trump’s administration has been pushing for the development of new chip factories in the U.S. to counter fears over the country’s reliance on China, South Korea and Taiwan for some of its most critical technologies.

Construction of the new factory will likely begin soon, and it’s hoped that the new plant could be up and running by the end of 2023, the Journal said. The factory would likely cost in excess of $10 billion to build, and it’s not yet clear what kind of financial incentives TSMC would receive from state or federal government. However, some investment is most likely to be forthcoming, as the Journal notes that both the State and Commerce departments are involved in the project.

TSMC’s clients include Apple Inc., Huawei Technologies Co. Ltd. and Nvidia Corp.

The Journal said it’s not clear how many jobs the new factory would create, but large chip factories of the kind TSMC is planning typically hire thousands of people.

As such, the news would likely be a big win for President Trump, who has long pushed for more manufacturing to be based in the U.S.

“We shouldn’t have supply chains,” Trump said on Thursday while discussing production-related matters during the COVID-19 pandemic. “We should have them all in the U.S.”

Analyst Patrick Moorhead of Moor Insights & Strategy previously told SiliconANGLE that discussions around the new factory were likely linked to the ongoing trade war between the U.S. and China.

“Ever since crumbling relations with China started early in Trump’s term, there has been a desire for more fab processors for critical infrastructure in the U.S.,” Moorhead said. “And even though Taiwan and South Korea are U.S. allies, there are fears that those fabs could be attacked. The shame here is that the administration allowed a very capable leading-edge fab, GlobalFoundries, to change its strategy to a low-power design fab.”

By agreeing to build the plant in the U.S., TSMC may also find some leeway as it attempts to get the White House to drop its plans to require an export license for chips that it sells to China’s Huawei. The proposed new rule would give the Commerce Department the authority to prohibit the sale of chips manufactured by TSMC for Huawei, which the U.S. deems a major national security threat. Huawei denies the allegations.

TSMC has long argued against the proposed rule, saying it would have a significant impact on its revenue.

Photo: nguy0833/Flickr

A message from John Furrier, co-founder of SiliconANGLE:

Your vote of support is important to us and it helps us keep the content FREE.

One click below supports our mission to provide free, deep, and relevant content.  

Join our community on YouTube

Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.

“TheCUBE is an important partner to the industry. You guys really are a part of our events and we really appreciate you coming and I know people appreciate the content you create as well” – Andy Jassy