The United States continues to hollow out TSMC. In order to save itself, the company has made a rare big move.
TSMC announced that they will build a new factory in the Tainan Science Park to mass-produce 3-nanometer advanced processes. The beam-laying ceremony will be held on the 29th of this month. TSMC's competitor Samsung announced the mass production of 3nm GAA chips as early as June this year, and held a grand factory event in July. Compared with Samsung, TSMC’s production plan is almost half a year behind schedule. (Data source: Reference News Network)
TSMC chips
Now TSMC is forced to transfer its production capacity to the United States. A large number of machinery and equipment and key engineering and technical personnel, together with their families, have been packaged and sent to the United States. When the internal emptiness is internal, why did TSMC choose to build a new factory with advanced processes on the island at this time? On the one hand,
is indeed for the development of the company. At present, the mainland already has good production capabilities with mature processes. Companies such as SMIC and have invested tens of billions to expand production. The production capabilities of other overseas companies cannot be underestimated. TSMC does not take much advantage in this field.
But the advanced process is different. This is an internationally scarce material and is also TSMC's core competitiveness. If you want to survive the cold winter of the chip industry, and if you want the company to move to a higher level, it is imperative to develop advanced processes. Moreover, major customers such as Intel and Apple will all use TSMC's 3nm process in the future, so it is reasonable for TSMC to build a new 3nm process plant for mass production.
Advanced process is the core competitiveness
On the other hand, TSMC’s new plan has a lot to do with the United States. In order to bring manufacturing back home and develop chip manufacturing capabilities, the United States has used various means to force TSMC to set up factories in the United States. The first batch of engineers going to the United States is 1,000, and this number will continue to increase and will double by the end of next year. In the future, these people will most likely stay in the United States, develop chips for the United States, and bring more consumption. Taiwan is experiencing a serious brain drain, and all kinds of capital will also be lost rapidly.
TSMC’s new factory in the United States is a bottomless pit. In addition to investing in talent and equipment, it also needs to continuously inject capital. The first phase of the new factory is expected to start mass production of the 4nm process in 2024, and the second phase of the project plans to start manufacturing the 3nm process in 2026. This series of decisions has caused TSMC's investment in new factories in the United States to continue to increase, from the initial US$12 billion to US$40 billion, becoming the largest foreign direct investment case in the history of Arizona. (Data source: Reference News Network, Global Times )
Biden
Seeing that 40 billion real gold and silver are about to fall into the United States, TSMC does not want to lose both manpower and wealth, so it rushes to build a new factory on the island before opening its 3-nanometer process plant in Arizona, retaining the few remaining technical talents and core equipment, and strives to prevent the United States from getting their 3-nanometer process technology first, retaining core competitiveness and allowing the company to continue operating. After all, setting up a factory in the United States is only the first step. After the factory is opened, various expenses will not be small. TSMC cannot count on the United States to do its best to help, so it needs factories on the island and elsewhere to continue mass production and make money to feed its American branch factories.
In addition, TSMC is also considering placating people by building a 3-nanometer factory on the island. Nowadays, the matter of building a factory in the United States is causing a stir, which has severely damaged public confidence. TSMC's image has also been greatly damaged, and it is ridiculed as "American Semiconductor Manufacturing Company." Taiwanese media claimed that TSMC’s construction of a new factory is a practical action to prove its determination to “deeply cultivate Taiwan” in the future and dispel the doubts of the outside world.
TSMC's new Arizona plant
TSMC's self-rescue approach looks good, but will everything really go so smoothly? The United States is bound to acquire TSMC's production capacity and technology, and will only take away more talent and equipment in the future. The existing factories on the island are already facing a shortage of manpower, and it will not be easy to recruit workers for the new factory. As long as there are no workers in the factory, no matter how advanced the technology is, it will not be able to produce chips.
Even if the new factory is finally put into production successfully despite all difficulties, TSMC will still have to supply American factories. Everyone knows that the cost in the United States is high and it is not an ideal investment place. The founder of TSMC also said that production in the United States is expensive and wasteful.Nowadays, TSMC’s real money is constantly pouring in. Not only is it difficult to repay the capital, but it may also affect the new factory. At least it will hinder the expansion of production capacity, and at worst it will be forced to close down and go bankrupt.
