TSMC plans US chip plant in victory for Trump
Taiwan Semiconductor Manufacturing Co Ltd, the biggest contract chipmaker, said it planned to build a $12 billion factory in Arizona in an apparent win for the Trump administration’s efforts to wrestle global tech supply chains back from China.
The plan, which will create over 1,600 jobs, comes as US President Donald Trump steps up criticism of Chinese trade practices and Beijing’s handling of the novel coronavirus ahead of the Nov 3 US presidential election.
Trump has long pledged to bring manufacturing back from overseas and now a steep economic slump brought on by the coronavirus is driving a government-wide push to end US production and supply chain dependency on China.
TSMC is a major supplier to US tech giants such as Apple Inc and Qualcomm Inc, as well as Chinese firms like Huawei Technologies Co Ltd, which Washington has put on a trade blacklist.
The Taiwanese chipmaker said the plan was to build the plant over nine years.
The plant, the biggest foreign investment by TSMC, will produce the most sophisticated 5 nanometer chips, which can be used in high-end defence and communications devices.
TSMC manufactures the bulk of its chips in Taiwan and has older chip facilities in China and Washington state.
US Secretary of State Mike Pompeo said chips from the new TSMC plant would power everything from artificial intelligence to 5G base stations to F-35 fighter jets.
Semiconductors play a key role in both consumer electronics and defence equipment. The vast majority of the most advanced chips are made in Asia, which has caused concern among US officials as a strategic rivalry with China deepens over the origins of the deadly coronavirus.
While Intel Copr has major manufacturing operations in the United States, it supplies only its own chips rather than making them for outside customers.
The Trump administration has been in talks with both Intel and TSMC to build a plant in the United States, and Intel said last week it was in discussions with the Department of Defense about improving domestic sources for microelectronics and related technology.
“The TSMC announcement is not expected to derail the Pentagon’s efforts to bolster the supply chain for microprocessors, despite the Commerce Department’s working on the TSMC deal independently,’’ a person familiar with the matter said.
TSMC said that construction of the Arizona facility would begin in 2021 with production targeted to begin in 2024, and that it would be able to process up to 20,000 silicon wafers per month. Each wafer can contain thousands of individual chips.