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TSMC Reportedly Plans to Build Five Additional Fabs in Arizona by 2024

TSMC North America fabs incoming
(Image credit: Shutterstock)

Rumors that TSMC will build more factories in Arizona than originally expected gained intensity today, with Reuters reporting that the company plans to build up to six fabs in the state over the next three years, according to its anonymous sources.

TSMC announced in November 2020 that it planned to build a single fab capable of approximately 20,000 wafer starts per month (WSPM) using the 5nm node. The fab‘s construction would be part of the creation of an Arizona-based subsidiary of TSMC financed by the U.S. government, the state of Arizona, and the company itself.

It didn’t take long for rumors to claim TSMC’s ambitions for its Arizona subsidiary wouldn’t stop with that fab. UDN reported in March that the company was planning to build up to six fabs in Arizona across several phases of development. But it was hard to believe that report in part because the first fab hasn’t even opened yet.

The corroboration from Reuters lends more credence to these rumors. According to this report, TSMC‘s plans to expand resulted from a request from the U.S. government, which has sought to reduce its reliance on foreign companies for its semiconductor supply chain due in part to the ongoing chip shortage.

Reuters also said that TSMC accounted for these five additional fabs when it purchased the land in Arizona, according to one of its sources. That could indicate the company planned to make a larger commitment in the U.S. from the start. It would make sense to keep those plans quiet until they’re finalized.

TSMC confirmed that in a statement to Reuters: “We have acquired a large piece of land in Arizona to provide flexibility. So further expansion is possible, but we will ramp up to Phase 1 first, then based on the operation efficiency and cost economics and also the customers' demand, to decide what the next steps we are going to do."

What exactly TSMC plans to do with those additional fabs is unknown. “It is not clear how much additional production capacity and investment the additional fabs might represent,” Reuters said, “and which chip manufacturing technology they would use.” Those decisions will likely be made based on the factors cited in TSMC’s statement.

Don’t expect those decisions to be made too soon—they’ll likely be informed by geopolitics, manufacturer demand, and other influences besides that can be hard to predict on a three-year timeframe. But at least for now it seems like TSMC is open to the idea of expanding its presence in the U.S. beyond what it originally announced.

  • InvalidError
    A new 5nm fab that does only 20k WSPM? That would be among the lowest throughput fabs in TSMC's arsenal. Must be a national security compliance thing or something else of a similar nature.
    Reply
  • gargoylenest
    I am wondering...they have stated the drought in Taiwan as a cause for diminished production, and they are building a new factory in a state that is known to have drought condition in the last 15 years?
    Reply
  • spongiemaster
    According to this report, TSMC‘s plans to expand resulted from a request from the U.S. government, which has sought to reduce its reliance on foreign companies for its semiconductor supply chain
    Hopefully, no one tells the gov't the "T" in TSMC does not stand for Tucson.
    Reply
  • InvalidError
    gargoylenest said:
    I am wondering...they have stated the drought in Taiwan as a cause for diminished production, and they are building a new factory in a state that is known to have drought condition in the last 15 years?
    If you know the area you are going to operate in is susceptible to droughts, you can build accordingly and it could be part of the reason why this new fab announcement is for what appears to be a very small fab based on WSPM. TSMC's Taiwanese fabs were built a while ago and the severe droughts are a recent development that TSMC and Taiwan in general will need to adapt to.

    Water shortages appear to be the new normal across half the globe thanks to less rain and most of the rain it gets coming down all at once.
    Reply
  • gargoylenest
    InvalidError said:
    If you know the area you are going to operate in is susceptible to droughts, you can build accordingly and it could be part of the reason why this new fab announcement is for what appears to be a very small fab based on WSPM. TSMC's Taiwanese fabs were built a while ago and the severe droughts are a recent development that TSMC and Taiwan in general will need to adapt to.

    Water shortages appear to be the new normal across half the globe thanks to less rain and most of the rain it gets coming down all at once.
    I understand that, but still, they know their fabs need steady water supply; why not go to somewhere where water supply is not an issue? according to your statement, that still leave the other half of the globe ... must have some awesome tax discount and subsidies to establish there? Or they plan on sucking the silicon valley brains?
    Reply
  • InvalidError
    gargoylenest said:
    I understand that, but still, they know their fabs need steady water supply; why not go to somewhere where water supply is not an issue? according to your statement, that still leave the other half of the globe
    Water isn't the only thing fabs need. They also need heaps of power, access to materials, access to equipment, access to transport, access to qualified labor, access to clients and geologically stable ground. TSMC wants most of its fabs in Taiwan because that's where it has access to nearly everything at once as most of its major clients and suppliers are on the island too.

    BTW, non-salty water is actually quite rare and is getting rarer with climate change causing rain to drop in different places, quantities and times, leaving reservoir levels much lower than normal. For example, California is entering its dry season with 1/6th of its average rainwater reserve. Precipitations across most of NA over the last year were significantly below average with (severe) drought forecasts for most of the center-west areas. Water shortages aren't exclusive to Taiwan.

    Many analysts predict we'll be seeing wars over access to drinkable water soon. Even VP Harris has said the next major wars will be over water instead of oil.
    Reply
  • gargoylenest
    InvalidError said:
    Water isn't the only thing fabs need. They also need heaps of power, access to materials, access to equipment, access to transport, access to qualified labor, access to clients and geologically stable ground. TSMC wants most of its fabs in Taiwan because that's where it has access to nearly everything at once as most of its major clients and suppliers are on the island too.

    BTW, non-salty water is actually quite rare and is getting rarer with climate change causing rain to drop in different places, quantities and times, leaving reservoir levels much lower than normal. For example, California is entering its dry season with 1/6th of its average rainwater reserve. Precipitations across most of NA over the last year were significantly below average with (severe) drought forecasts for most of the center-west areas. Water shortages aren't exclusive to Taiwan.

    Many analysts predict we'll be seeing wars over access to drinkable water soon. Even VP Harris has said the next major wars will be over water instead of oil.
    you must live near equator to say that. Move north or south and fresh water is not rare. Brazil, Russia, Canada and China account for half of earth freshwater reserve. A hint to prevent going into a war over freshwater...dont live in a desert ;)
    Reply
  • InvalidError
    gargoylenest said:
    you must live near equator to say that. Move north or south and fresh water is not rare. Brazil, Russia, Canada and China account for half of earth freshwater reserve. A hint to prevent going into a war over freshwater...dont live in a desert ;)
    Precipitations in Canada have been on a slow but steady decline for the last 20 years. Snow melt is a significant contributor to steady fresh water supply through a good chunk of summer and there won't be much of that happening if winters don't get cold enough for mountains to hold their snow and ice. Springs usually bring river overflows through much of Ontario and Quebec but last winter was too hot and 70cm (35%) short on snowfall, so nothing major happened.

    Just because much of Canada does not have immediate water supply issues does not mean they aren't coming. There will likely be more calls than usual to reduce water usage this summer.
    Reply