TSMC Begins Construction Of 5nm Arizona Chip Factory

The head of Taiwan Semiconductor Manufacturing Company (TSMC) has confirmed that construction of a chip factory has begun in Arizona.

TSMC CEO C.C. Wei was quoted by Taiwan News as speaking on Tuesday during the firm’s annual technology symposium. Wei reportedly confirmed that the firm had started construction at its Arizona site.

It should be remembered that in April TSMC had pledged to invest $100m funding to bolster advanced chip manufacturing over the next three years, in order to meet demand.

Chip demand

TSMC is the world’s largest contract chipmaker, but it has been battling fierce demand for chips in the past year.

The chip shortage is the result of a perfect storm of events, namely increased demand for electronic devices due to people being housebound during the Coronavirus pandemic, as well as US sanctions against Chinese tech firms, coupled with a severe drought in Taiwan which is also hampering chip production.

Forrester Research recently warned it expects the chip supply issues to extend through next year and into 2023.

Michael Dell, the CEO and founder of Dell Technologies, the world’s third largest personal computer vendor, also recently warned the chip shortage is not going away soon, and may take a number of years to resolve.

But TSMC is investing heavily to ramp up production in the US.

In November 2020 TSMC announced that it would provide an investment of paid-in capital of $3.5 billion to set up a wholly-owned subsidiary in Arizona.

Arizona fab

That came after the firm had announced in May 2020 that it was building a $12 billion factory in Arizona.

The plan at the time was to build the plant over nine years, and construction would begin in 2021.

It was the biggest foreign investment by TSMC at the time.

The Taiwanese chipmaker hopes the factory will begin production in 2024 and will make sophisticated 5 nanometer chips, which can be used in high-end defense and communications devices.

The factory is expected to process up to 20,000 silicon wafers per month. Each wafer can contain thousands of individual chips.

TSMC manufactures the bulk of its chips in Taiwan, and has older chip facilities in China and Washington state.

Additional factories

Reuters quoted TSMC as confirming that the planned 5-nanometer process fab remains on track, with volume production expected to start sometime in 2024

The Arizona fab is being built on a 1,129-acre tract of land it bought in north Phoenix.

Reuters claims TSMC intends to build as many as six factories at its Arizona campus over the next 10 to 15 years.

Wei also reportedly said the company’s next 3-nanometer process chips are on schedule to begin volume production by the second half of next year. The chips will be manufactured at its facility in the Southern Taiwan Science Park in Tainan.

TSMC is not the only firm building chip factories in Arizona.

In February Intel said it would spend $20 billion to build two new fabs in Arizona, in an effort to bolster production at its existing fab in the state.

Intel also said it would re-enter the contract chipmaking business, to make chips for outside customers.