However, the 300mm fab will be relatively small compared with a 5nm facility called Fab 18 being brought up by TSMC in Tainan, Taiwan. It is also notable that the wafer fab is not being labeled as a 3nm facility, although it would likely be able to migrate production to the 3nm node and beyond during the course of its lifetime.

The exact location of the Arizona wafer fab was not revealed nor that amount of financial support that TSMC will receive to build the wafer fab.

Such investments usually attract up subsidies of up to a third of their value in terms of tax breaks. TSMC has had a US fab plan under consideration for several years but has recently come under pressure from President Trump’s administration (see US talks to Intel, TSMC about building local foundry fabs).

TSMC said that construction was scheduled to start in 2021 with chip production intended to begin in 2024 using the company’s 5nm manufacturing process technology. The total cost of the project would be about $12 billion from 2021 to 2029.

The foundry added that the fab would have a manufacturing capacity of 20,000 wafer starts per month and would create about 1,600 jobs directly and thousands more indirectly.

“This US facility not only enables us to better support our customers and partners, it also gives us more opportunities to attract global talents. This project is of critical, strategic importance to a vibrant and competitive US semiconductor ecosystem that enables leading US 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 company said in a statement.

Next: Bend with the wind

There are hints in that quote that TSMC has been under pressure to make this announcement from both the US government directly and indirectly through its leading customer Apple, to create a leading-edge fab in the United States. Apple alone was responsible for about 23 percent of TSMC’s sales in 2019, according to reports (see HiSilicon breaks into top ten chip vendor ranking).

TSMC is general prefers to keeps its manufacturing in large clusters of fabs on its native island of Taiwan. It does have one US wafer fab – in Camas, Washington. This is there for legacy reasons and is left over from a joint venture operation called WaferTech established in 1996. The original partners – Altera, Analog Devices and ISSI – wanted local manufacturing and guaranteed supply during times of allocation but subsequently dropped out of the joint venture. This left WaferTech as a wholly-owned subsidiary of TSMC and TSMC’s only US wafer fab.

If it goes ahead an Arizona facility would be TSMC’s second manufacturing site in the US although it has design centers in Austin, Texas and San Jose, California. TSMC also has wafer fabs in Nanjing and Shanghai, China.

However, the planned Arizona fab is not large by TSMC’s standards

The Arizona fab is due to follow on from TSMC’s Fab 18 at Tainan in the south of Taiwan scheduled to begin producing 5nm silicon in 2020. That fab is due to be built out in three phases over several years. But once all three enter production the facility’s estimated annual capacity will exceed one million 12-inch wafers, approaching 100,000 wafer starts per month.

The planned investment for Fab 18 is NT$500 billion or about US$16.6 billion. In October 2019 TSMC was reported to have broken ground for a 3nm wafer fab that would be completed in 2023 with an anticipated lifetime cost $19.6 billion.

Related links and articles:

News articles:

TSMC is planning a US wafer fab . . . again

US talks to Intel, TSMC about building local foundry fabs

Analysis: TSMC ponders US wafer fab while awaiting trade rule changes

HiSilicon breaks into top ten chip vendor ranking

TSMC’s 3nm foundry could cost $20 billion

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