[Comprehensive News] Recently, TSMC, which serves foundry chips for Apple, , Huawei and other companies, announced on its official website that they will build a chip production factory in Arizona with an investment of up to US$12 billion.
This factory will mainly produce 5nm chips and produce them for related partners. The factory can produce 20,000 semiconductor wafers per month, directly creating more than 1,600 high-tech professional positions, and creating thousands of indirect jobs for the semiconductor ecosystem. Construction is planned to start in 2021 and start production in 2024.
TSMC CEO Liu Deyin spoke at the sub-forum. (Photo source: Xinhua News Agency data photo)
comes to the United States to build a factory. TSMC will be unable to make a move without US subsidies
Comprehensive financial industry and TechWeb reports, TSMC has long insisted that establishing a wafer factory in Arizona is not cost-competitive, and due to supply chain and logistics challenges, it takes time to build a wafer factory.
Judging from the published fab site selection, Arizona is an extremely suitable site selection. Since the Intel factory is built in the region, the labor supply for semiconductor manufacturing is sufficient.
In addition, Intel will likely shrink its business as AMD continues to seize market share from Intel, coupled with Intel's further lag in fab technology. Given Intel's troubles and TSMC's continued strong performance, TSMC should be able to recruit the talents needed for wafer fabs without too much challenge.
Establishing a fab in Arizona will significantly increase costs for U.S. customers or reduce TSMC's profit margins if there is no subsidy. According to Wccftech, the U.S. semiconductor industry, including TSMC, has recently lobbyed the government to provide $37 billion in support for the industry, and these demands have been widely supported by lawmakers from both parties. The first bill supporting the industry will establish a $10 billion federal program to cooperate with state and local government incentives for building semiconductor factories, according to the Wall Street Journal . Foreign and U.S. companies are eligible for the fund, and the bill will also allocate $750 million to form a alliance with foreign governments to promote transparency in chip supply chains.
According to Bloomberg , TSMC hopes that the United States can provide funds to make up for the cost difference between producing semiconductors in the United States and production in Taiwan, China. "Subsidies will be a key factor in TSMC's decision to build fabs in the United States," the report quoted TSMC Chairman Liu Deyin at the company's recent shareholder meeting. "We are still negotiating with the U.S. government. Our demand is that the state and federal government work together to bridge the manufacturing cost gap between the United States and Taiwan, China."
The exact nature and value of the subsidies that the federal government may provide has not been announced. A spokesman for the Arizona Department of Commerce said that any documents provided by Arizona related to the construction of TSMC's factory cannot be published until the project is completed.
TSMC, which does not want to lose Huawei, is gradually moving away from Huawei
Because he is in the whirlpool of international relations with Huawei, in the past two months, TSMC has experienced multiple polar reversals such as "promising not to go to the United States to build factories", "announced to go to the United States to build factories", "take Huawei's emergency order", "it is rumored to be cut off from supply Huawei", "denied the supply of severance of Huawei", and "promising to comply with the US export ban on Huawei".
According to the comprehensive portal of China's communications industry, Nina Kao, head of the public relations department of TSMC, said: "This is really a business decision for TSMC and has nothing to do with politics."
However, on May 12 this year, TSMC also stated that "there is no plan to build a factory in the United States." But just three days later, TSMC announced that it would spend $12 billion to build a chip factory in Arizona, USA. On May 15, at a briefing on the White House news background about Huawei, senior officials mentioned the news that TSMC will set up a factory in the United States in the future. Huawei and TSMC, two Chinese companies, received welcome and bans from the US government on the same day. Han Rubo, president of the US-Taiwan Business Association, admitted the meaning of date coincidence without hesitation: “Yes, the two are related.It may be a coincidence that the statement was issued on the same day, but the force behind it is undoubtedly related. "
But TSMC also has a very difficult time to part with Huawei, a major order owner. Last year, as the company's second largest customer, Huawei contributed NT$152.876 billion (about US$5.2 billion) in revenue to TSMC, an increase of more than 80% per year, accounting for 14% of total revenue. In late May this year, TSMC increased its lobbying efforts against the U.S. government. It hired former U.S. Chamber of Commerce executive Nicholas Montella as the director of government relations. According to Bloomberg, Montella lobbies Washington to help TSMC avoid the impact of deteriorating Sino-US relations on its business.
At the shareholders' meeting on June 9 this year, Liu Deyin said that he hoped not to lose Huawei HiSilicon orders, but at the same time he comforted shareholders, "If it is really lost, I believe TSMC can fill the vacancy in a very short time. "US companies including Apple, Qualcomm , MediaTek , Supermicro, etc. have significantly added 7nm orders in the fourth quarter to TSMC, which seems to be expected to block the gap vacant from Huawei.
Related supply chain companies have expressed their willingness to follow the United States to build factories
Several months ago, the US government asked TSMC to consider building chip factories in the United States and require the adoption of the most advanced process equipment. This trend is in response to Trump 's manufacturing industry's policy of returning to the United States, with the goal of enhancing the high-tech manufacturing industry in the United States, increasing employment, increasing the United States' voice in the field of semiconductor manufacturing, and obtaining new technologies.
The United States' semiconductor manufacturing industry is the world's number one, why do we need TSMC's technology?
According to IC Insights data, there are currently only three semiconductor companies that can manufacture line widths below 10nm: Intel, TSMC and Samsung . Among them, TSMC's technology is the most advanced.
Currently, TSMC's 5nm process has begun to import customer products, and mass production can be started in the second half of this year. Samsung Electronics is a few months later and plans to start importing customer products in the second half of this year. Intel is still hovering in the 10nm stage (of course, Intel's continuous improvement of the 10nm process is comparable to Samsung and TSMC's 7nm process in terms of indicators such as transistor density and power consumption).
In addition, after TSMC announced that it will build a factory in the United States, relevant supply chain companies have expressed their willingness to follow the factory in the United States. , provide better services to customers TSMC. Currently, Han Tang, Fan Xuan and other companies in TSMC Supply Alliance have announced that they will go to the United States to build factories.
TSMC Chairman Liu Deyin has previously stated that he will invite TSMC's supply chain companies to build factories in the United States, and related companies have also shown their ambition to compete for orders.
Han Tang Chairman Chen Chaoshui said that wherever customers want us to go, Han Tang will go. Han Tang is a large factory in the clean room factory system. There was no company in the United States before. This time, he went to the United States to build factories in order to compete for TSMC's orders. (End)
