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TSMC unveils plans for another US chip factory, WSJ says

Taiwan Semiconductor Manufacturing Co. wants to build another chip factory in Arizona on top of a $12 billion complex it has already committed to.

Taiwan Semiconductor Manufacturing Co. wants to build a new chip factory in Arizona on top of a $12 billion complex it already has, the Wall Street Journal reported, citing people familiar with the plans.

The world’s largest contract chipmaker will announce its intention to establish another facility north of Phoenix, next to the factory under construction, the Journal reported. The new investment should be similar to that of the first project, it added. Company representatives did not respond to requests for comment.

The Biden administration is seeking to attract investment in U.S. chip manufacturing as part of its effort to counter China’s ambitions and secure components essential to national security. That effort accelerated after widespread shortages that began around the end of 2020 and 2021, illustrating how chips were central to manufacturing everything from cars to smartphones.

Washington, dangling with incentives of about $50 billion for local projects, has hailed TSMC’s Arizona expansion as a triumph in efforts to bring advanced chip manufacturing back to America. But the Taiwanese company has said it cost much more to make semiconductors in the US, although those higher costs were manageable with state support.

TSMC, whose manufacturing facilities are mainly located in Taiwan, has begun to diversify over the past year to meet the demand in major countries seeking to bolster domestic semiconductor manufacturing. It joins rivals such as Samsung Electronics Co., which is also establishing a $17 billion fab in Texas.

The company is building a $7 billion facility in Japan and is also in early talks with the German government about the possible location of a factory in the European country, Bloomberg News reports.

A major expansion of TSMC’s US plans would spur the Biden administration’s overall efforts to ensure the country stays ahead of China in the semiconductor race.

Aside from boosting incentives for local chip production, the US has imposed a plethora of restrictions on shipping advanced technology to China, aiming to reduce the flow of chips helping Beijing’s military and tech sector.

Xi Jinping promised in a landmark speech last month that tech self-reliance would prevail in a battle with the US for tech supremacy — which many took as a sign that Beijing will double down on policy and financial support for sectors such as AI and chips.

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