TSCM is building 5nm Fab in Arizona

TSCM is building 5nm Fab in Arizona

Conditio sine qua non

After weeks of speculations, TSMC has officially confirmed that Taiwan based TSMC announced its intention to build and operate an advanced semiconductor fab in the Arizona, United States.

The deal comes with mutual understanding and commitment to support from the U.S. federal government and the State of Arizona. To the trained ear, this sounds like something impossible to say no.

Timing is impeccable too, as China sees Taiwan as its rebelled province, and Taiwan sees itself as a sovereign state. Considering that the U.S. and China relations are probably close to an all-time low, timing to make a TSMC factory in the U.S. is excellent.

The U.S. also wants to manufacture sensitive items at home, and considering its military budge, and there are a lot of chips that will need advanced nodes for this machinery in the future.

Why Arizona?

5-nanometer fab will be built in Arizona with 20,000 semiconductor wafer per month capacity. It will create over 1,600 high-tech professional jobs directly and thousands of indirect jobs in the semiconductor ecosystem.

Construction is planned to start in 2021, with production targeted to begin in 2024. Keep in mind that by that time, 5nm will not be the leading-edge technology as the volume production for the next generation 3nm is expected in late 2022. After 3 nm comes 2nm nod, but this is something that still doesn’t have a solid birthday date.

US$12 billion investment until 2029

TSMC’s total spending on this project, including capital expenditure, will be approximately US$12 billion from 2021 to 2029. TSMC claims that this project is of critical strategic importance to a vibrant and competitive U.S. semiconductor ecosystem that enables leading U.S. companies to fabricate their cutting-edge semiconductor products within the United States and benefit from the proximity of a world-class semiconductor foundry and ecosystem.

The state of Arizona had to chip in on this excellent investment, and it doesn’t surprise us that Intel has several fabs in this state. One can imagine that TSMCs hopes to get at least some of these talents.

In the United States, TSMC currently operates a fab in Camas, Washington, and design centers in both Austin, Texas and San Jose, California. The Arizona facility would be TSMC’s second manufacturing site in the United States.