Despite a long lead time, the new TSMC fab capacity should bolster US-sited production capabilities.
Microchip manufacturing giant TSMC will further expand its plans for a third fabrication plant in Arizona, thanks to a grant from the Biden Administration that will provide $6.6 billion in subsidies as part of the CHIPS and Science Act.
The funding was anounced today with the signing of a preliminary agreement between the Taiwanese company and the US Department of Commerce. TSMC said that the third fab site will let it better serve the high demand for its most advanced semiconductor process technologies in the US.
“Our US operations allow us to better support our US customers, which include several of the world’s leading technology companies,” said TSMC chairman Mark Liu in a statement. “Our US operations will also expand our capability to trailblaze future advancements in semiconductor technology.”
The three fabs, which will be situated near Phoenix, will each manufacture different types of chips, according to TSMC’s statement. The first, which is set to begin production in the first half of 2025, will produce chips using the company’s 4nm process technology. The second, slated to open in 2028, will produce 2nm and 3nm chips, while the third will cover 2nm and even more advanced chip designs.
TSMC’s US production has faced delays in getting up and running. The first Arizona foundry, which was announced in 2020, was set to open later this year and is now on track to begin production in the first half of 2025. The company announced in January that the second foundry, originally slated for a 2026 opening, would also be delayed. TSMC said today that it aims to have its third fab in operation by 2030.
The third fab had long been discussed, according to Gartner vice president analyst Bob Johnson, who added that TSMC is unlikely to even break ground on the project for another three or four years.
“They also talked about putting their 2nm process into their second Arizona fab to start production around 2028,” he said. “That will be about three years after they do it in Taiwan.”
Despite the semiconductor supply chain being fraught with political tensions and market instability, this is a move toward the positive. Major US clients of TSMC, including Nvidia, Apple, and AMD, it’s crucial to have US factories as a fallback if issues arise in Taiwan, stated Johnson. Read more here: Chipmakers report minimal disruptions from Taiwan earthquake
According to TSMC, the foundries collectively will generate approximately 6,000 high-tech posts in Arizona. The Greater Phoenix Economic Council has released studies indicating that over 20,000 construction jobs will be made accessible due to TSMC’s projects.
