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TSMC to Open 5nm Factory in Arizona

(Image credit: Shutterstock)

Taiwan Semiconductor Manufacturing Co., known colloquially as TSMC, is expected to announce plans to build a new Arizona factory later this week, according to the Wall Street Journal (update: TSMC's announcement has now gone live). That would bring the world’s largest independent chipmaker stateside, potentially drastically increasing the speed with which American companies could produce new devices.

Speaking to unnamed “people familiar with the matter,” the Wall Street Journal says TSMC made the decision during a board meeting on Tuesday in Taiwan, and is likely to officially reveal the plans as soon as Friday. This follows news from earlier this March that the U.S. is planning to block TSMC from shipping to Chinese tech company Huawei, which may have informed the decision to open an American factory.

According to one of the Journal's sources, “The State and Commerce Departments are involved in the plans,” which could lend credence to this theory. The extreme wait times to ship parts from Asia to the US during the coronavirus pandemic might also have influenced the decision, as well as a general worry about American dependence on Asian technology (both for economic and security reasons) that has plagued the manufacturer as early as January.

“TSMC’s new plant would make chips branded as having 5-nanometer transistors,” the Wall Street Journal writes, referring to another unnamed source. This would put the new factory on par with TSMC’s Taiwan operations, which only recently started producing 5nm chips.

The Wall Street Journal doesn’t yet know whether TSMC made the decision under the promise of US financial incentives, or what the company’s budget for the new factory is. It does state, however, that “The factory could be producing chips by the end of 2023 at the earliest,” according to one of its sources.

This news also contradicts a Digitimes report from earlier this week that, despite pressure from the Trump administration, TSMC would not be opening up any American factories anytime soon.

“We shouldn’t have supply chains,” President Trump said on Fox Business last Thursday, during a discussion about how the pandemic is affecting production. “We should have them all in the US.”

Whether this points to a cheapening of American labor in the face of unprecedented unemployment, a new approach to international business following the pandemic, or even an attempt from TSMC to strengthen American relations and perhaps get the Huawei block removed, we can’t say for certain.

What we do know is that, right now, the only American chipmakers who can produce transistors 10nm or smaller work for Intel, and Intel's fabs primarily focus on proprietary Intel products. A stateside TSMC factory would provide more immediate access to cutting-edge silicon fabrication tech for Intel's competitors like AMD, as well as general tech like Nvidia, Qualcomm and TSMC’s largest client, Apple.

Update 5/15/2020 10:33 EST: TSMC has officially confirmed its intention to build an Arizona factory via a post on its website, where the company stated "its intention to build and operate an advanced semiconductor fab in the United States with the mutual understanding and commitment to support from the U.S. federal government and the State of Arizona."

Matching WSJ's report, the factory will produce 5nm chips as well as have a monthly capacity of 20,000 semiconductor wafers per month.  TSMC claims that the factory will directly create "over 1,600 high tech professional jobs," with "thousands of indirect jobs in the semiconductor ecosystem" following as a result.

TSMC is committing $12 billion to the facility's construction, and is planning to begin construction in 2021, with chip production slated to start in 2024.
 

  • spongiemaster
    Pretty surprised if this is true. Isn't TSMC expected to hit 3nm in late 2022 to early 2023? Why would you plan to build a 5nm fab scheduled to open in 2023 now? Unless a 5nm fab is "easily" modified to produce 3nm wafers.
    Reply
  • TechyInAZ
    Great to hear this!! Arizona is one of the best states for semiconductor facilities to open up at. In the area's surrounding Phoenix there's alot of empty desert to build. And the dry humidity helps.

    We already have several Intel plants here in AZ, and i believe a couple are being worked on still.
    Reply
  • Gurg
    Great news! Bring production to America and stop buying ChiCom.
    Reply
  • AlistairAB
    Gurg said:
    Great news! Bring production to America and stop buying ChiCom.

    TSMC is Taiwanese, not ChiCom. Taiwan is the greatest country, free China.
    Reply
  • InvalidError
    spongiemaster said:
    Why would you plan to build a 5nm fab scheduled to open in 2023 now?
    Likely because it expects 5nm demand to continue quite some time into the future. While high-performance digital circuitry may benefit a lot from being made on the smallest process possible, analog and micro-power stuff prefers larger processes with tighter tolerances and lower leakage.

    Different product classes require different fab processes. Why is Intel adding more 14nm fabs when 10nm and 7nm are incoming? Because 14nm will remain a workhorse for other stuff like EMIB and FOVEROS long after it falls out of favor for mainstream CPUs and GPUs.
    Reply
  • BT
    Great News, at least for National Security purposes. But I fear most of these will be Visa Jobs, not domestic Americans. AZ has huge Fab footprint already to draw from, though.
    Reply
  • spongiemaster
    InvalidError said:
    Different product classes require different fab processes. Why is Intel adding more 14nm fabs when 10nm and 7nm are incoming? Because 14nm will remain a workhorse for other stuff like EMIB and FOVEROS long after it falls out of favor for mainstream CPUs and GPUs.

    Are they building new 14nm fabs? Or just increasing capacity at existing fabs, and using more 3rd-party 14nm fabs? If Intel had hit 10nm years ago like they thought they would and all their mainstream CPU's were on 10nm now, there would be no need to increase 14nm capacity. It's clear at this point that whatever 10nm Intel comes up with, it isn't going to be their primary node. 14nm is going to continue to be their primary node until 7nm hits in '21/'22.
    Reply
  • InvalidError
    spongiemaster said:
    Are they building new 14nm fabs? Or just increasing capacity at existing fabs, and using more 3rd-party 14nm fabs?
    Fab 11X is being upgraded from 32-45nm to 14-22nm, that is basically a whole new 14nm fab on its way for 2020-2021.
    Reply
  • dstln
    spongiemaster said:
    Pretty surprised if this is true. Isn't TSMC expected to hit 3nm in late 2022 to early 2023? Why would you plan to build a 5nm fab scheduled to open in 2023 now? Unless a 5nm fab is "easily" modified to produce 3nm wafers.

    Old fab lines pump out chips for years and years. Not every device needs cutting-edge. I think 200+nm fabs are still being used.
    Reply
  • InvalidError
    dstln said:
    Old fab lines pump out chips for years and years. Not every device needs cutting-edge. I think 200+nm fabs are still being used.
    Yup, Intel's #18 is still doing 200mm 65nm wafers, last fab left that isn't on 22nm or better once 11X's upgrade is complete.

    And then you have power semiconductor manufacturers still using micron-scale (1000+nm) fabs since power stuff requires thick metal and insulation layers that are easier to do on larger processes. Precision analog and micro-power stuff is also done on larger processes with tighter tolerances and lower leakage too.
    Reply