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.