[Asia Economy Reporter Jeong Hyunjin] Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturer), announced on the 6th (local time) that it will expand its investment in the semiconductor factory in Arizona, USA, to $40 billion (about 53 trillion KRW), tripling the initially planned scale. An additional semiconductor fab will be built near the first factory currently under construction, applying the state-of-the-art 3-nanometer (nm; 1 nm is one billionth of a meter) process at this point in time.
U.S. President Joe Biden, who has been focusing on securing semiconductor supremacy, expressed optimism on the 6th (local time), saying, "There has never been a more optimistic time for America's future." Upon hearing the news that 'Made in America' semiconductors will be produced, Apple CEO Tim Cook, as well as U.S. semiconductor companies AMD and Nvidia, welcomed the announcement, stating they will be "important users" of TSMC's U.S. factory.
◆ TSMC to Apply State-of-the-Art 3nm Process at Arizona Fab
According to CNBC and others on the 6th (local time), TSMC held an equipment installation ceremony at its factory located in Phoenix, Arizona. At the event, TSMC announced that it would expand its U.S. investment from the original $12 billion to $40 billion and aims to generate $10 billion in annual revenue.
TSMC officially confirmed it will build an additional factory in Arizona. Following the first factory, which began equipment installation and is scheduled to start mass production in 2024, the second factory is planned to be operational in 2026, according to the U.S. Biden administration. The White House National Economic Council (NEC) reports that if TSMC fully operates its Arizona factories, the annual semiconductor production capacity will reach approximately 600,000 wafers, sufficient to meet the annual domestic demand in the U.S.
TSMC also decided to upgrade the process technology level at the Arizona factory beyond the initial plan. The first factory's process will be enhanced from 5nm to 4nm, and the second factory will apply the 3nm process. The Nihon Keizai Shimbun reported, "Building a 4nm process factory requires an investment of over 1 trillion yen, and for 3nm, more than 2 trillion yen is needed," adding, "This is why TSMC decided to increase its investment scale this time."
Foreign media are paying attention to the fact that TSMC's decision came after the enactment of the U.S. CHIPS Act. TSMC founder Morris Chang had repeatedly expressed negative messages about building manufacturing facilities in the U.S., citing high manufacturing costs, and had voiced the need for subsidies to support TSMC's U.S. investments. The White House appeared to take credit for attracting investment by announcing the expansion news before President Biden attended TSMC's event.
◆ Biden: "Never Been More Optimistic About America's Future" Expresses Expectations
At TSMC's event, President Biden said, "Last April, TSMC announced a $12 billion investment to build its first semiconductor factory in the U.S. Today, TSMC announced a second investment and will produce 3nm chips here in Phoenix." He emphasized, "TSMC is investing $40 billion, the largest scale in Arizona's history, creating 10,000 high-tech jobs."
President Biden pointed out that although the U.S. developed semiconductors, its current semiconductor production accounts for only 10% of global production, reaffirming the commitment to reviving manufacturing in key sectors such as semiconductors. He said, "I asked CEOs of companies like TSMC whether making significant investments in manufacturing sectors needed by the U.S. would attract or repel the industry. I have never been more optimistic about America's future. We are building a better America."
Core customers have actively expressed their welcome for TSMC's expanded semiconductor investment in the U.S. Apple CEO Tim Cook personally attended the equipment installation ceremony at the TSMC factory and said Apple will use semiconductors made at this factory. He said, "Thanks to the efforts of many, these semiconductors can now proudly bear the 'Made in America' mark," calling it an "incredibly tremendous moment."
TSMC supplies advanced semiconductors, including processors used in Apple's key products such as iPhone, iPad, and Mac. Currently, most semiconductors supplied to Apple are produced in Taiwan, but with the application of 4nm and 3nm processes at the Arizona factory, it is expected that Apple's advanced semiconductor procurement will be possible within the U.S.
At the event, representatives from other major U.S. customers of TSMC, including AMD and Nvidia, also attended. AMD CEO Lisa Su attended and stated that AMD will be an important user of TSMC's Arizona factory.
Once TSMC's factory begins mass production, both advanced semiconductor design and manufacturing will be possible within the U.S. However, some view this investment as symbolic, noting that TSMC maintains its principle of being based in Taiwan and that its core factories remain rooted in Taiwan.
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