TSMC planning $25 billion 3nm fab in Arizona

Posted on Monday, May 17 2021 @ 09:34 CEST by Thomas De Maesschalck
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Both the US and Europe want a larger slice of the global chip manufacturing pie but it seems the former has more success in attracting foundries. A new report from Reuters claims prospects for an advanced European plant have faltered.

$25 billion 3nm fab in Arizona

Instead, TSMC is doubling down on its operations in Arizona. Last year, TSMC announced it would construct a $10 billion to $12 billion 5nm facility in Phoenix. Over the last couple of months, rumors hit the web that Arizona could eventually become the home to a TSMC mega campus consisting of six plants.

The new report from Reuters indicates the Taiwanese foundry has plans for a second, more advanced facility at the Phoenix operations. The second plant could cost $23 billion to $25 billion and would make 3nm chips.
Officials have also sketched out plans for TSMC to make next-generation 2-nanometer and smaller chips as the Phoenix campus is built out over the next 10 to 15 years, the person said.

In building the plants, TSMC is likely to compete against Intel Corp (INTC.O) and Samsung Electronics Co Ltd (005930.KS) for subsidies from the U.S. government. President Joe Biden has called for $50 billion in funding to support domestic chip manufacturing, and the U.S. Senate could take action on that as early as this week.

Why TSMC is not interested in Europe

Allegedly, TSMC is not interested in pursuing a factory in Europe because the old continent lacks a significant customer base. A EU-based foundry would need to attract US-based customers -- which is another hurdle on top of the higher operating costs than in Asia.

Most TSMC customers in Europe are car makers, which do not require cutting-edge nodes. European chip and auto firms are reportedly against the idea of a leading-edge chip plant in Europe:
European chip and auto companies, for their part, are mostly lined up against the idea. They would prefer subsidies for the older-generation chips that are heavily used by car manufacturers and are in short supply.
Reuters says TSMC is still investigating an option to build a mature node chip plant in Europe -- to serve automotive clients.

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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