TSMC May Build Up To Six Chip Fabs In Arizona To Satisfy Voracious Customer Demand

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Given the incredible demand for microchips these days that power everything from smartphones to engine control units (ECUs) in automobiles, fabs are working overtime to satisfy global demand and still coming up short. Intel this week announced a $3.5 billion expansion of its New Mexico chip fab, which is part of its $20 billion efforts to construct two all-new fabs in Arizona.

Not to be left out, chipmaker Taiwan Semiconductor Manufacturing Co (TSMC) is also looking to expand its footprint to supply a greater number of chips to its vast customer base. However, TSMC isn't just looking to grow within its home market of Taiwan; it has already announced plans to expand into Intel's [fab] backyard of Arizona.

TSMC announced its plans to build a $12 billion fab in Arizona a year ago, and it's already reportedly talking about further expansion. The original fab, which then-President Donald Trump championed, was projected to produce 20,000 12-inch wafers per month using the company's current 5nm node. However, by the time the plant would come online for volume production, 5nm won't be bleeding edge.

TSMC Wafers

Reuters now reports that TSMC is onboard to build [up to] five additional fabs in Arizona, according to sources familiar with the company's plans. Unfortunately, what's unknown is how much extra capacity these new fabs will bring or if the fabs will be geared for nodes below 5nm.

"The United States requested it. Internally TSMC is planning to build up to six fabs," said a source that spoke with Reuters. The comment is in reference to the Biden administration's efforts to establish a greater supply chain with the U.S. for semiconductor chips. The U.S. was once a hotbed for activity in the semiconductor business but has fallen by the wayside as tech centers in Taiwan, and other low-cost regions have taken the chip production crown.

TMSC is "considerably ahead of [Intel]" on the manufacturing side, said Intel CEO Pat Gelsinger in an interview with 60 Minutes that aired on Sunday evening. "We believe it's going to take us a couple of years and we will be caught up."

TSMC has committed to invest $100 billion into additional fab capacity over the next three years, dwarfing Intel's $20 billion investment. "In order to keep up with demand, TSMC expects to invest 100 billion over the next three years to increase capacity to support the manufacturing and research and development of advanced semiconductor technologies," said TSMC in early April. "TSMC is working closely with our customers to address their needs in a sustainable manner."