Taiwan Semiconductor Manufacturing’s (TSMC) investment in an Arizona plant will more than triple to a total of $40 billion.
Key Details
- The world’s largest chip manufacturer has increased its planned investments into an Arizona facility for a total of $40 billion.
- Previous plans for investment in the plant were $12 billion.
- Greater investment will result in a second, more advanced facility being built just outside of Phoenix.
- Current plans anticipate the plant being ready by 2026. The new facility will produce 3-nanometer chips—currently the most advanced chips available.
- In addition to further monetary investment, the facility will now plan to employ 4,500 people rather than 1,600.
- The announcement came shortly before a planned ceremony on Tuesday attended by President Joe Biden.
Why it’s news
Increased investment in the Arizona plant marks another success for the White House’s plans to promote domestic production of semiconductor chips and bolster national security.
In part, the decision to invest further is driven by TSMC plans to produce chips for Apple in the U.S. TSMC is the main producer of chips for all Apple products. As Apple has been looking to diversify its supply chain, the tech company has made moves to find production outside of China and the surrounding areas.
At the Tuesday event, Apple CEO Tim Cook confirmed that the company would be using chips produced by the Arizona facility.
“Today is only the beginning. We’re combining TSMC’s expertise with the unrivaled ingenuity of American workers. We are investing in a stronger, brighter future, we are planting our seed in the Arizona desert. And at Apple, we are proud to help nurture its growth,” Cook says.
TSMC’s original Arizona plant will be ready for production by 2024. This plant will produce 4-nanometer chips that are currently used in Apple products like the iPhone 14 Pro. When both the 4-nanometer and 3-nanometer facilities are online, TSMC will produce 60,000 wafers monthly.
Backing up a bit
TSMC isn’t the only chip manufacturer looking to expand in the U.S. IBM announced an investment in the Hudson Valley area not long after President Biden’s signing of the Chips and Science Act. The legislation featured $52 billion dedicated to promoting the production of microchips in the U.S.
The incentive to move chip production to the U.S. is an attempt to compete with Chinese production. During the pandemic, supply chain disruptions resulted in a shortage of semiconductor chips, small but significant components of nearly every modern device ranging from washing machines to vehicles to military weapons.
So far, the Chips Act combined with the Inflation Reduction Act—which in part contains incentives for green energy—seems to be successfully drawing production to the U.S.
Micron, one of the largest U.S. chipmakers, announced plans in September to invest $15 billion in a new factory located in Boise, Idaho.
Construction on Micron’s new factory will begin in 2023. When completed, it will be the largest chipmaking cleanroom, or fabrication room, in the U.S. at 600,000 square feet.