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In Phoenix, a Taiwanese chip giant builds a hedge against China

In Phoenix, a Taiwanese chip giant builds a hedge against China

In Phoenix, a Taiwanese chip giant builds a hedge against China

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Former President Donald J. Trump and now Biden administration officials have pushed for measures to encourage foreign and domestic chipmakers to build more factories in the United States. Democrats and Republicans, swayed by a recent chip shortage, agreed in July to a $52 billion grant package in the CHIPS and Science Act for larger expenditures related to building such factories.

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Chipmakers responded by announcing big factory plans, including by Intel in Ohio, Micron Technology in New York and Samsung Electronics in Texas. But the most coveted producer these days is TSMC, whose founder Morris Chang in 1987 pioneered the concept of making chips for other companies to design them.

TSMC is by far the largest “foundry” in the world, as the industry calls these services, and has recently acquired the most advanced manufacturing technology. Besides Apple, its big customers include Amazon, Qualcomm, Nvidia and Advanced Micro Devices.

These companies have not publicly expressed concerns about the concentration of chip manufacturing in Taiwan, which faces risks associated with earthquakes and droughts in addition to China’s claims. But the presence of senior executives from several of the companies at Tuesday’s event suggests strong support for having more key components for their products made close to home.

The expansion plan in Phoenix shows that customer pressure is having a greater influence on TSMC, which has long argued that concentrating production in giant “gigafabs” in Taiwan was most effective, analysts and regulators said. industry leaders.

TSMC softened that stance somewhat in 2020 by agreeing to open the Phoenix factory. But the company has set a limit on the level of factory production technology, which is assessed by measuring how large a company can manufacture key individual transistor parts on a chip. The smaller these dimensions – measured in nanometers or billionths of a meter – the more transistors can be placed on a piece of silicon.

The company initially set the technology level at the Phoenix site at five nanometers. It was a step up from most chips in 2020, but below the level TSMC would produce in Taiwan in 2024, when the US factory was due to open. The new plan would upgrade the factory to also use four-nanometer technology, which Apple was the first to adopt. The second factory, which is expected to start operating in 2026, will be able to produce three-nanometer chips, TSMC said.

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