Apple Supplier TSMC Rethinks 1Nm Chip Plant Location Amidst Residents' Opposition

After facing significant backlash from local residents, the Taiwan Semiconductor Manufacturing Company (TSMC) has decided to reconsider the location initially chosen for its upcoming 1nm chip factory.

What happened: According to a report by 9to5Mac, the Taiwanese tech giant TSMC, a key supplier for Apple Inc. AAPL, had originally planned to construct its new chip manufacturing plant in Longtan, Northern Taiwan. However, the chosen location would have required certain residents to relocate, causing a wave of protests.

In response to the protests, TSMC has agreed to explore alternate sites for its new factory. The company aims to work alongside the government-run Science Park Administration to identify suitable land within Taiwan to construct semiconductor factories. The details of the potential alternative sites have not been revealed yet.

Building a new plant involves substantial power and water resources, indicating a substantial infrastructure investment. Recognizing the industry’s crucial role, Taiwan’s Economic Minister ensured that the government would offer the necessary support.

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Why it matters: This development follows TSMC’s growing confidence in Japan, where it plans to commence chip production in 2024 in a factory based in Kyushu. As reported in September 2023, TSMC is contemplating increasing capacity and adding another fab in Japan for advanced chips.

Moreover, TSMC recently faced a significant drop of 13.4% on-year in September sales. This slump was part of a larger trend affecting Apple and its key suppliers despite the recent launch of new iPhone models and various Android devices.

Earlier in 2023, TSMC reported a modest year-over-year growth in revenue amid falling contributions from most of its end markets, according to an April Benzinga report. The company also predicted a decline in second-quarter revenue and a contraction in gross margin.

As TSMC continues to work towards expanding its chip-making capabilities and planning to produce 1nm chips, these recent developments will play a crucial role in shaping the company’s future growth and strategies.

Photo by Sundry Photography on Shutterstock

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