Taiwan Semiconductor Manufacturing Co has sought to allay concerns that its massive investment in chip production in the US could weaken Taiwan’s own strategically important industry at a time of heightened tensions with China.
TSMC chair Mark Liu said last week that the world’s largest contract chipmaker had invested a total of NT$1.86tn ($60.7bn) in 3-nanometre and 5-nm chip production — among the most advanced in the world — at its factory in the Tainan Science Park in south-western Taiwan.
That amount, which is about 50 per cent more than the $40bn it plans to invest in the US, “shows TSMC’s commitment to Taiwan”, Liu said at a ceremony at the factory marking the expansion and start of mass production of 3-nm chips.
The majority of TSMC’s production remains in Taiwan but the company has started to build chip plants in the US and Japan as countries and clients from around the world push to onshore chip production. The company is also considering building its first European chip plant in Germany.
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The investment in Tainan has created around 10,000 high-tech jobs and 23,500 construction positions, Liu said, adding that semiconductors would only become more important in the tech supply chain over the next 10 years.
Liu also confirmed for the first time that TSMC will build six phases, or stages of expansion, at its 2-nm chip plants in the central Taiwanese city of Taichung and the northern city of Hsinchu.
Nanometre refers to the distance between transistors on a chip. The smaller the distance, the more advanced and more powerful the chips are. The mobile processors for Apple’s iPhone 14 Pro and 14 Pro Max are made with TSMC’s 4-nm process technology.
TSMC’s US plant will eventually make chips using 3-nm technology but, for now, the chipmaker’s 2-nm tech remains entirely in Taiwan.
Taiwan’s vice premier, Shen Jong-chin, who also spoke at the event, said TSMC’s move had shown the world that rumours that the chipmaker was trying to shift capacity away from Taiwan were “completely baseless”.
Taiwan is one of Asia’s most important tech hubs, with the world’s second-largest semiconductor industry by revenue after the US. But the self-ruled democratic island has faced significant aggression from Beijing, which views Taiwan as a part of its territory and has not ruled out seizing it by force. Concerns over geopolitical conflicts have added to pressure on TSMC to diversify some manufacturing to other locations.
A version of this article was first published by Nikkei Asia on December 29 2022. ©2022 Nikkei Inc. All rights reserved