TSMC Has Big Plans for Small Chips

Silicon wafer
(Image credit: TSMC)

On Thursday Taiwan Semiconductor Manufacturing. Co talked about some of its expansion plans outside of Taiwan. The company said that it had started preparations to build a fab in Japan and outlined plans to expand its production capacity in China. The company also announced that its fab in Arizona would start mass production of chips as soon as in Q1 2024. Meanwhile, TSMC officially confirmed that it was mulling to expand manufacturing capacity in Arizona.  As reported by Nikkei Asia.

In TSMC's earnings call, TSMC chairman Mark Liu spoke about the need to expand its manufacturing footprint in order to bolster TSMC's competitiveness. Which would better serve its customers.

The Arizona Fab: On Track for Q1 2024 

TSMC, which for years has produced all of its chips using advanced fabrication processes exclusively in Taiwan, last year announced plans to build a $12 billion N5/N5P/N5A-capable (5 nm) fab in Arizona and recently started its construction. The move will significantly improve TSMC's positions in the U.S. among customers that would prefer to produce chips in the country (i.e., those who serve government and military agencies) and will allow TSMC to diversify its manufacturing base.  

The fab is set to start mass production of chips in the first quarter of 2024. Its initial manufacturing capacity will be about 20,000 300-mm wafer starts per month, which is a pretty small fab by TSMC's standards. But even before construction started, unofficial sources began to indicate that TSMC was contemplating building additional fab modules to expand capacity of its manufacturing operations in the U.S. 

At the conference call with financial analysts and investors the company officially confirmed that it was mulling expansion of its Arizona production capacity, but did not elaborate. 

A Specialty Fab in Japan: Due Diligence Process Initiated 

As many industries now crucially depend on chips, Japanese authorities earlier this year proposed Sony Group and TSMC to build a fab in Japan to ensure stable chip supply to semiconductors to local automakers and other companies. TSMC is already building an R&D facility in Japan. Furthermore, there are many chip developers in Japan, so there was rationale in the proposal. 

This week TSMC confirmed that it was conducting a due diligence on a speciality fab in Japan. The company is evaluating the needs of its customers (such as Sony, NXP, Renesas, etc.), build up costs, and operating efficiency. So far, no decision has been made and the fab is not a part of TSMC's $100 billion CapEx for the coming years. 

Fab 16 in China: On Track for a 60% Expansion 

TSMC runs a relatively small Fab 16 in Nanjing, China, to serve local customers, including those from the automotive industry. The fab processes wafers using TSMC's various 28 nm process technologies as well as thicker nodes, but since demand for all chips is high, it makes a lot of sense to expand capacity of this manufacturing facility too. 

During the call TSMC reaffirmed plans to spend $2.8 billion on expansion of its Fab 16. The foundry intends to boost the fab's output to 40,000 wafer starts per month, or by 60%, by middle-2023 to meet 'urgent needs' of its clients.  


TSMC has rather big plans for overseas expansion. The fabs in the U.S. and China are already counted in its CapEx budgets, so they will be built if nothing extraordinary happens. It remains to be seen whether the company proceeds with its Japanese specialty fab plan though. 

Meanwhile, Taiwan remains TSMC's manufacturing stronghold as the company will keep its leading-edge technologies, such as N4 and N3 in the country for the foreseeable future.

Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.