Apple Supplier TSMC Plans To Build Advanced Chip Packaging Plant In US: Report

Apple Inc. AAPL chip supplier and foundry Taiwan Semiconductor Mfg. Co. Ltd. TSM could soon have its first chip packaging unit outside of Taiwan, according to reports.

What Happened: TSMC is planning to build an advanced manufacturing plant in the U.S. meant for chip packaging using advanced tech — a process that integrates different chips onto wafers, the Nikkei reported.

The interest in breaking ground in the U.S. may have been necessitated by the U.S. government's desire to bring into the country the whole chip supply chain, the report said.

Chip manufacturers such as Intel Corporation INTC and Samsung Electronics Co Ltd (KRX: 005930) are vying with TSMC with incorporating the most advanced of technologies into chip packaging.

Related Link: Why Apple Chip Supplier TSMC's Board Approved $2.8B Spending

Why It's Important: The Taiwanese company derives about 62% of its total revenues from the U.S., the Nikkei report stated. The U.S. is likely adopting a cautious disposition, given the global semiconductor shortage and the strained relation between the U.S. and China.

Any disruption in the supply of chips from Taiwan would risk a $500 billion loss in revenues for electronics makers who count on the island's output, the Nikkei said, citing a U.S. government report.

TSMC is already constructing a chip manufacturing plant in Arizona at a cost of about $12 billion over the course of nine years between 2021 and 2029. Production from the facility could start as soon as 2024.

At last check, TSMC's NYSE-listed shares were down 0.63% at $117.50 at publication Friday.

Related Link: 8 Intel Analysts On Q4 Report: Why Some See Difficult Years Ahead For Chipmaker

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