TSMC Still Won't Commit to Building a US Fab

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By Niels Broekhuijsen
published

TSMC is looking into potential overseas locations.

TSMC headquarters in Silicon Valley

TSMC headquarters in Silicon Valley (Image credit: Shutterstock)

TSMC has been subject to increasing pressure from the Trump administration to consider plans for a chip factory in the U.S., but according to a report from DigiTimes today, the Taiwanese chipmaker said it has no such plans.

Reports of TSMC being urged to build a fab in the U.S. have been around since early this year. The purported reasoning is that the U.S. wants to be less dependent on Asia for its chip manufacturing in the name of security.

According to today's report, TSMC is looking into possible locations outside of Taiwan -- and the U.S. is one of those -- but TSMC said it hasn't made any plans for a new fab yet. DigiTimes' article comes after a Wall Street Journal report on Monday stating that the Trump administration is talking to TSMC, as well as Intel, about building factories on U.S. soil. 

Although TSMC hasn't ruled out the possibility of a U.S. fab, chairman Mark Liu previously told DigiTimes that if TSMC were to build a factory in the U.S., it would be because of consumer demand.

Liu also explained that it would not be cost-effective for TSMC to build a factory in the U.S., as the country wouldn't be able to match the production costs of its fabs in Taiwan. 

All that said, TSMC reportedly has its hands full these days. TSMC is said to be supplying Nvidia with many of its high-end Ampere chips, with Nvidia also turning to Samsung to produce the lower-end parts.

Meanwhile, TSMC is investing heavily in 5nm fabrication and has already started development for its tiny 2nm chips that are expected to be very powerful and efficient.

Niels Broekhuijsen
Niels Broekhuijsen

Niels Broekhuijsen is a Contributing Writer for Tom's Hardware US. He reviews cases, water cooling and pc builds.

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11 Comments Comment from the forums
  • daworstplaya
    I guess Mark Liu (TSMC) doesn't care if Taiwan eventually gets invaded by China.
    Reply
  • Co BIY
    My guess is that he does care but also realizes that preventing that is not his job and he is not in a position to do much about it.

    From a purely strategic planning perspective the best strategy to guaranty US intervention in a Communist invasion of Taiwan might not be to outsource manufacturing to the US but to instead concentrate production in Taiwan and make it "Too critical to fall" to the Red Chinese. Sending factories to the US might lessen the incentive to protect Taiwan.

    The same strategy of concentration on the island of Taiwan might also make invasion less attractive to the Communists because if the possibility of damaging the same critical production. Too valuable to risk damage through invasion. Sending factories to mainland China might make invasion more likely as they make Taiwanese production less valuable to China.

    Or most likely, although TSMC is a very important global company even it has very little influence over the Communist Chinese government and is a very small player in a geopolitical sense.
    Reply
  • irish_adam
    China came under communist control in 1949 and they have been talking about invading Taiwan ever since. I don't know why people are so convinced it will happen any day now, its far less likely now than 50 years ago.

    On topic though, why should a Taiwanese company want to build a factory in the US? If the US is so concerned about its manufacturing then maybe it should have invested in Global Foundries when it was still in the race. Hell it could still pay them to get back in it. The US has nothing to offer foreign chip manufacturers except higher production costs.
    Reply
  • GenericUser
    Co BIY said:
    Or most likely, although TSMC is a very important global company even it has very little influence over the Communist Chinese government and is a very small player in a geopolitical sense.

    Occam's Razor :)
    Reply
  • Gillerer
    ... or in other words: "Why would we want to give the US yet another means to extort/force us?"

    *

    Seriously, since most of the assembly of products that take the chips that TSMC makes are in Asia, it makes sense to produce the chips near there.

    And don't for a second assume it makes any sense to start assembling in the US - products would be at least twice as expensive. Or alternatively, if trying to reach costs even comparable (no more than ~150%) to Asia, the quality would take a nose dive; Good luck getting low wage workers in the west to work diligently and at low error rates.

    daworstplaya said:
    I guess Mark Liu (TSMC) doesn't care if Taiwan eventually gets invaded by China.

    Funny. As if the TSMC operations in US would still be in the company's control if that were to happen.

    The likelihood of it happening is slim. It's more likely that some geopolitical stuff (Trump and US sanctions against everyone) will turn the Taiwanese people off, and in some general election pro-China parties get majority.
    Reply
  • BT
    If the US demands all CPU and GPU made for US/US Gov are made in US terrority it will happen. AMD and Nvidia have US Gov contracts and are US companies anyway.
    Reply
  • irish_adam
    BT said:
    If the US demands all CPU and GPU made for US/US Gov are made in US terrority it will happen. AMD and Nvidia have US Gov contracts and are US companies anyway.
    What? AMD and Nvidia chips are made outside of the US, if the US made that demand they would be unable to buy anything, the US government does not buy so much as to be able to make that demand and if they did they would just get laughed at. They would either have to cave or put up with old outdated equipment.
    Reply
  • BT
    irish_adam said:
    What? AMD and Nvidia chips are made outside of the US, if the US made that demand they would be unable to buy anything, the US government does not buy so much as to be able to make that demand and if they did they would just get laughed at. They would either have to cave or put up with old outdated equipment.

    Wasn't always like that. Anyway US already has export restrictions on many nations for US tech/software/HPC and tooling. Obviously once Taiwan Falls to China it will have to be done anyway. Now that Nvidia and AMD are major HPC players for US Gov they have more of incentive to playball. The US has Fabs, just lazy Intel and Global Foundries and IBM did not want to spend billions to maintain their process advantage or build the capacity so AMD and Nvidia went to TSMC. It would take 4 years to restart US production in 5-7nm node though, but it is inevitable.
    Reply
  • spongiemaster
    BT said:
    If the US demands all CPU and GPU made for US/US Gov are made in US terrority it will happen. AMD and Nvidia have US Gov contracts and are US companies anyway.
    Irish_adam is right, they would get laughed at making that demand. What leverage does the gov't have? The gov't doesn't spend enough to make that a financially viable option for any company that isn't already doing it. Even if they did, who would they choose if everyone refused? They can't threaten to exclusively buy from US only fab company X if X doesn't exist.
    Reply
  • BT
    I was mostly correct. TSMC will build a Fab in Arizona. Looks like Apple is the end user, not AMD and Nvidia. But still 5nm.
    Reply