- The largest contract chip maker Taiwan Semiconductor Manufacturing Company Ltd TSM, prepared for another multibillion-dollar factory investment in Arizona, the Wall Street Journal reports.
- The leading Apple Inc AAPL supplier plans to announce building a cutting-edge semiconductor plant north of Phoenix beside another chip factory that the company committed to in 2020.
- The scale of the investment will likely be similar to the $12 billion it committed two years ago.
- Also Read: US $52B Chip Funding For Intel, TSMC, Samsung Will Cost Them China Ambitions: Report
- TSMC's move follows Washington's plans to provide semiconductor makers lucrative grants to bring advanced manufacturing back to American soil.
- TSMC's new facility would manufacture so-called 3-nm transistors, some of the tiniest and lightning-fast possible.
- Demand for some chips has cratered following two years of pandemic-fueled demand.
- Many chip companies, including TSMC, have cut back on near-term capital-spending plans and reined costs to cope with the downturn.
- The report noted that despite the near-term industry gloom, chip executives still expect global sales to double to over $1 trillion a year in the next decade, underpinning considerable investments in manufacturing capacity.
- Factory-building incentives are also helping their spending plans in the U.S. and Europe.
- TSMC plans to hold a ceremony in Arizona in December to install the first batch of production equipment in the plant it announced two years ago. TSMC said back then that it would produce 5-nm chips there.
- TSMC is now ready to produce more advanced 4-nm chips with larger capacity at the facility. The plant will likely start mass production in 2024.
- The U.S. and its allies have grown concerned about the concentration of advanced chip-making in TSMC's homeland of Taiwan, a self-governing island that Beijing claims as part of its territory.
- TSMC has been building the most advanced facilities at home but also has explored production in other regions, in part responding to promised incentives.
- Price Action: TSM shares closed higher by 3.60% at $65.02 on Tuesday.
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