TSMC Plans to Build Semiconductor Factory in Singapore...Possibility of Subsidy Payment

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturer), is reportedly planning to build a new semiconductor factory worth billions of dollars in Singapore, according to the Wall Street Journal (WSJ) on the 19th (local time).

WSJ cited multiple sources saying that TSMC's new semiconductor factory has not yet been finalized and that specific plans are still under discussion. Singapore may provide subsidies to attract the TSMC factory, and the Singapore Economic Development Board (EDB) is currently negotiating with TSMC on this matter.

TSMC has set a capital expenditure budget of $40 billion to $44 billion (approximately 51 trillion to 56 trillion KRW) for this year. TSMC is investing $12 billion to build a semiconductor factory in Arizona, USA, and is also establishing a new semiconductor factory in Kumamoto Prefecture, Japan, with subsidies from the Japanese government and investment from the Sony Group.

A source said that TSMC is exploring the possibility of establishing a semiconductor factory in Singapore using 7 to 28 nanometer (nm; 1 nm = one billionth of a meter) process technology, which is widely used in automobiles and smartphones. Singapore has attracted numerous global semiconductor factories based on its abundant workforce and smooth supply chain.

GlobalFoundries and Micron from the United States, as well as Germany's Infineon, already have large-scale production facilities in Singapore. GlobalFoundries announced last year that it would invest $4 billion to build a new semiconductor factory scheduled for completion in 2023. Taiwan's UMC also announced in February that it would invest $5 billion to increase production capacity at its Singapore factory.