TSMC has announced plans to double its US chip factories as Europe stops talking


Taiwan Semiconductor Manufacturing Co plans to pump tens of billions of dollars more into advanced chip factories in the U.S. state of Arizona than it previously revealed, but is cool about the prospects of a advanced European factory, people familiar with the matter said. Reuters.

TSMC is the world’s most advanced chipmaker, and its investment plans are being closely watched amid a global chip shortage and new initiatives in the United States and Europe to subsidize semiconductor production. TSMC announced last year that it would invest $ 10 billion (approximately 73,320 crore rupees) to 12 billion dollars (approximately 88,000 crore rupee) to build a chip factory in Phoenix.

Reuters this month reported that the previously disclosed plant could be the first of six plants planned at the site. Now, company officials are wondering if the next plant should be a more advanced facility capable of making chips with the 3-nanometer chip-making technology compared to the slower and less efficient 5-nanometer technology used to make chips. the first factory.

The more advanced 3-nanometer plant could cost $ 23 billion (roughly 1.68640 crore rupees) to 25 billion dollars (approximately 1.83,300 crore rupees), a person familiar with the matter told Reuters. . Details of TSMC’s plans for additional factories at the Arizona site have not been previously reported.

Officials have also sketched out plans for TSMC to make next-generation chips of 2 nanometers and larger as the Phoenix campus builds in the next 10 to 15 years, the person said.

ALSO READ  HP ZBook Studio G8, Power G8, and Fury G8 laptops launched

By building the factories, TSMC is likely to compete with Intel and Samsung for US government subsidies. President Joe Biden has called for $ 50 billion (roughly Rs 3.66,610 crore) in funding to support domestic chipmaking, and the US Senate may take action on it as early as this week.

Some government officials fear that grants to TSMC could help Taiwan, where the company would likely continue to conduct research and development, more than in the United States. But the US subsidy plan does not exclude foreign companies.

Government and industry officials say a strong national chip manufacturing sector is essential for the economy and national security. Although US chip companies such as Qualcomm and Nvidia dominate their markets globally, most of their chips are made in Asia.

Intel has also committed to two new manufacturing plants, or fabs, in Arizona, while Samsung is planning a $ 17 billion (roughly Rs.124,640 crore) plant adjacent to an existing facility in Austin, Texas.

There is also a debate on how to boost chip manufacturing in the European Union. Intel has shown serious interest in these efforts, with CEO Pat Gelsinger launching a grant that could amount to $ 9 billion (around Rs. 66,000 crore) for a proposed “Eurofab” on a trip to Brussels on last month.

ALSO READ  OnePlus 9, OnePlus 9 Pro Android 12 Developer Preview Build re-released

European Industry Commissioner Thierry Breton, who championed the Eurofab idea, also spoke with TSMC European President Maria Marced last month. Although Breton publicly called TSMC’s speech a “good deal”, a second person familiar with the matter said the TSMC talks in Europe went “very badly”.

A TSMC spokeswoman said the company was not ruling out any possibility, but there were no plans for a factory in Europe.

European chip and auto companies, for their part, are mostly aligned against the idea. They would prefer subsidies for older generation chips which are heavily used by automakers and are scarce.

Many of TSMC’s more lucrative customers, like Apple, are based in the United States, while its European customer base is made up mostly of automakers buying less advanced chips. In the first quarter, customers based in Europe and the Middle East accounted for just 6% of TSMC’s revenue, far exceeded by 67% of sales in North America and 17% in Asia-Pacific.

Sources said TSMC has not ruled out building an older generation chip factory in Europe to serve automotive customers.

Intel poaching

TSMC this year hired Benjamin Miller, a 25-year Intel veteran, to head human resources in Arizona. The company says it hired 250 engineers there and about 100 of them and their families have been sent to Tainan, Taiwan, where they will undergo a 12 to 18-month training program before returning to Arizona.

ALSO READ  RedmiBook Pro 14 and RedmiBook Pro 15 laptops get AMD Ryzen processors

TSMC declined to comment on specific details of its plans for Arizona, but its chief executive CC Wei said last month that “further expansion is possible” after an initial phase. He said the company would assess the site’s effectiveness and customer demand and decide on the next steps.

TSMC chairman and founder Morris Chang warned last month of higher operating costs and a meager pool of talent for U.S. projects in a rare public speech attended by Wei and Chairman Mark Liu.

“In the United States, the level of professional dedication does not match that of Taiwan, at least for engineers,” Chang said. He warned that “short-term subsidies cannot compensate for long-term operational disadvantage.”

TSMC’s first plant in Arizona will be relatively small, with a projected production of 20,000 wafers – 12-inch silicon disks that can each hold thousands of chips – per month. In contrast, TSMC’s “gigafabs” in Taiwan can produce 100,000 wafers per month.

But TSMC executives take a long-term view, starting with mature technology and increasing the volume while gradually introducing more advanced processes, said a third person familiar with the matter. Like the others, the person refused to be identified due to the subject’s sensitivity.

“You just don’t go to Phoenix, 10,000 miles away, and start cutting edge manufacturing,” the person said.

© Thomson Reuters 2021