TSMC Not Leaving, Says Taiwan as Arizona Factory Fuels Worry

 

Taiwan’s economy minister said the island remains TSMC’s most important production base, after concerns rose over the chipmaker’s plan to bump up investment at its new plant in the US.

TSMC announced on Tuesday it would more than triple its planned investment at its Arizona plant to $40 billion.

That sparked anxiety in Taiwan, where semiconductor manufacturing is the backbone of the economy, about a “goodbye to Taiwan” trend among chip firms. TSMC, which makes most its chips in Taiwan, is also building a factory in Japan.

 

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The first Arizona chip fabrication facility, or fab, will be operational by 2024 while the second facility nearby will make the most advanced chips currently in production, called “3 nanometre,” by 2026.

TSMC Chairman Mark Liu said both fabs will together “manufacture over 600,000 wafers a year, representing $10 billion in yearly revenue.”

Speaking on the sidelines of parliament, Taiwan Economy Minister Wang Mei-hua said the island’s position as a major semiconductor producer and maker of the most advanced chips was secure.

“TSMC’s research and development centre is in Taiwan, the complete supply chain is here,” she said. “Taiwan has a complete supply chain, a complete system, and the backing of the government. It is definitely TSMC’s most important production base.”

The production of 3nm chips is already happening in Taiwan, and the even more advanced 2nm and 1nm development and production in Taiwan are also on track, Wang added.

 

‘Deliberate manipulation’

Kung Ming-hsin, head of Taiwan’s National Development Council who attended Tuesday’s “tool-in” ceremony for the Arizona plant in Phoenix, decried what he called a wrong theory about chip makers abandoning the island.

“Some people domestically are now deliberately manipulating the good things of this kind of cooperation as ‘the semiconductor industry chain is leaving Taiwan’, which is an incorrect statement,” his office cited him as saying.

Kung sits on TSMC’s board as a representative of its largest shareholder, the government’s National Development Fund.

TSMC is the world’s largest contract chip maker and a major supplier to global tech firms including Apple. It has repeatedly said that the bulk of its manufacturing will remain in Taiwan.

Meanwhile, Taiwan has also been keen to show the United States that as a “like-minded democracy” it is a reliable semiconductor partner and supplier. The US is the island’s most important international supporter and arms seller in the face of mounting Chinese military pressure.

But the government is also rolling out more support for the chip industry at home, including proposing larger tax breaks for technology companies’ research and development to retain its competitive edge.

It is also encouraging more foreign tech firms in the chip supply chain to invest in Taiwan.

 

• Reuters, with additional editing by Vishakha Saxena

 

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