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TSMC Starts Construction Of Its $12 Billion Chip Factory In Arizona

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TSMC has reportedly begun the construction of its $12 billion chip factory in Phoenix, Arizona. The Taiwanese company plans to produce 5nm computer chips at this factory starting in 2024, Reuters reports. It is reportedly on track to achieve that target.

In April this year, TSMC announced that it will invest a whopping $100 billion over the next three years to increase chip manufacturing capacity. Around $30 billion of that spending will come this year. The investment is part of a combined effort to resolve the ongoing global semiconductor chip shortage.

“That [$100 billion investment over the next three years] will give us enough manufacturing capacity to support the growth of our clients,” TSMC CEO C.C. Wei said during the company’s annual technology presentation to clients and investors earlier this week. The event was held online for the second year running because of the COVID-19 pandemic.

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The other two big chip manufacturers, Samsung and Intel, have also announced similar investment plans to increase their respective production capacity. All three companies are working on setting up new factories in the US. The American government has offered $54 billion in subsidies for the chip industry to lure more companies to its soil. The Biden administration is aiming to make America self-sufficient in terms of chip production by setting up more fabs in the country.

TSMC says construction of Arizona chip factory is on track

A report last month said that TSMC plans to build as many as six chip manufacturing plants in the US over a period of 10-15 years, including the one that is currently being set up in Phoenix. The world’s largest contract chip manufacturer is leading the fightback to mitigate the ongoing chip shortage. Since the outbreak of the COVID-19 pandemic last year, the Taiwanese firm has grown into Asia’s most valuable manufacturing company. Its market capitalization of $563 billion is more than twice that of Intel’s.

Intel, though, is stepping up its chip manufacturing game as well. It recently announced a $20 billion investment to expand its chip production capacity to address shortages at US car plants. The company plans to set up two factories in Arizona.

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The ongoing chip shortage problem has particularly affected the automobile industry. The shortage is of less advanced chips. However, TSMC isn’t slowing down the development of its advanced 5nm and 3nm chips either. The company has reportedly developed a new version of its 5nm chip technology for automobiles.

Moreover, it is on track with the development of its 3nm chip technology as well. The company aims to start the mass production of 3nm chips in the second half of 2022.