10% of This Year's Investment Scale... Production Capacity Also 2% of Total
Industry: "Face-Saving Investment Amid US-China Dispute"
TSMC
[Asia Economy Reporter Ki-min Lee] Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturer), recently announced plans to establish a factory in the United States, but considering the timing of mass production, products, and scale, it is being evaluated as 'below standard.' This is seen as a face-saving investment amid the US-China dispute linked to US sanctions on Chinese telecom company Huawei. The industry is also paying close attention to whether Samsung Electronics, another semiconductor powerhouse, will make additional semiconductor investments in the US.
According to industry sources and major foreign media on the 21st, when examining the details and scale of TSMC's investment in the US semiconductor factory, it is interpreted as a 'minimal investment' to demonstrate political neutrality. The investment amount related to the semiconductor factory that TSMC will build in Arizona, USA, is about $1.3 billion (approximately 1.6 trillion KRW). This amount is less than 10% of TSMC's total investment of $15 billion (approximately 18.4 trillion KRW) this year.
Furthermore, considering that the expected mass production start time for TSMC's US factory is 2024, there are criticisms that it is difficult to regard it as an advanced process at the nanometer scale. The semiconductors produced at TSMC's US factory will be based on 5-nanometer technology. TSMC already began producing 5-nanometer chips at its Taiwan factory at the end of last year and plans to start mass production within this year. According to TSMC's roadmap and the industry, TSMC expects to begin mass production of 3-nanometer and 2-nanometer chips in 2022 and 2024, respectively. The production capacity is also about 20,000 12-inch wafers per month, which is only 2% compared to TSMC's total 12-inch fab production capacity of 800,000 wafers per month.
Samsung Electronics, a major player in the semiconductor industry expected to face US investment pressure, is inevitably facing significant challenges. Samsung established its Austin factory in 1996, and its sales in the first quarter of this year reached 1.1021 trillion KRW. The process level is 11 nanometers or higher, lagging behind domestic foundry lines. Samsung's $15 billion (approximately 18.5 trillion KRW) investment since 2017 to expand its NAND flash factory in Xi'an, China, is cited as a comparison point in the US. However, Samsung has taken a fundamental stance, stating that "no decision has been made regarding US investment."
Industry forecasts suggest that even if Samsung Electronics proceeds with semiconductor investments in the US, the scale will be similar to TSMC's investment. Due to issues such as workforce allocation and parts supply, the main supply chains of global semiconductor companies are centered in Asia. The fact that US labor costs are about 1.5 times higher than those in Asian countries is also likely to act as an obstacle. From Samsung's perspective, utilizing the Austin factory site could be effective for cost reduction. It is estimated that there is still space at Samsung Electronics' Austin factory to add three more fabs (production facilities).
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