Apple Supplier TSMC Eyes 'Second Phase' Expansion In US

What Happened: The Taiwan-based company, which supplies chips to Apple Inc AAPL, said it will expand production capacity in China and did not rule out the possibility of a "second phase" expansion at its $12 billion manufacturing facility in Arizona. 

In addition, the chipmaker, which also counts Nvidia Corp NVDA and Qualcomm Inc QCOM as customers, is also reviewing a plan to set up a specialty technology wafer fabrication plant, or fab, in Japan.

See Also: Apple Supplier TSMC Sees Q2 Profit Jump 11% On Higher Chip Demand

Why It Matters: Taiwan makes the majority of the world’s most advanced chips that are used in smartphones, laptops, and cars. TSMC’s overseas expansion is being seen as a move aimed at lowering the dependability on a particular region, especially given China’s geographical proximity to Taiwan, Reuters noted.

A global semiconductor chip shortage has boosted demand as automakers, smartphone and appliance makers scramble to secure supplies. Further, the pandemic has lifted the demand for work and learn-from-home devices.

Chipmakers are scrambling to meet demand and expand capacity. Semiconductor giant Intel Corp INTC is in talks to buy contract chip maker GlobalFoundries for $30 billion, the Wall Street Journal reported on Thursday, citing sources.

Price Action: TSMC shares closed 5.5% lower at $117.53 on Thursday.

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Photo: Courtesy of Taiwan Semiconductor Manufacturing Co., Ltd