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TSMC To Invest $120 Billion In Semiconductor Expansion, New Fabs

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TSMC has been the world’s largest contract chip manufacturer for several years and its dominance may remain unchallenged for years to come. The Taiwanese giant recently completed the construction of four new chip fabrication facilities in the Southern Taiwan Science Park to expand its manufacturing capacity. It is now looking to erect four more fabs in the industrial park, Nikkei Asia reports. Each new plant will cost around $10 billion. TSMC is reportedly looking to invest around $120 billion to strengthen its grip on the global semiconductor market.

According to the new report, TSMC will manufacture advanced semiconductors (3nm-level) in the new facilities. The company recently announced its chip production roadmap. It will begin making 3nm chips this year. Over the next few years, the Taiwanese firm will also introduce advanced 3nm processors tailored to performance and power efficiency. It plans to jump to the 2nm technology in 2025.

Samsung, TSMC’s arch-rival in the foundry space, has similar plans too. It will also begin 3nm mass production later this year and gradually expand to 2nm by 2025. The Korean firm distantly follows TSC in this market but it’s hoping to eat up some of its rival’s ground over the next few years with its superior 3nm tech. Samsung is upgrading to the GAAFET (gate-all-around field-effect transistor) architecture for its next-gen processors while the Taiwanese firm is sticking to the older FinFET (fin field-effect transistor) architecture. The latter will use GAAFET on its 2nm solutions.

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Samsung has already announced a $355 billion investment plan to bolster its semiconductor production. TSMC is now countering its rival with a multi-billion dollar investment plan of its own. They both want big manufacturing contracts from the likes of Apple, Qualcomm, MediaTek, and AMD.

Taiwan continues to be the global semiconductor hotbed

The tech industry was shaken by a global semiconductor shortage recently. Several businesses were affected. It also showed the importance of a robust and diverse supply chain. The US government is encouraging chip companies globally to increase their production in the country. The Biden administration is offering huge incentives to these companies as it fears that overreliance on Taiwan for semiconductors could lead to more unprecedented problems as the island nation is at risk of a Chinese invasion.

Several big firms including Samsung, TSMC, and Intel have already announced new chip fabrication plants in the US to take advantage of the incentives. However, Taiwan’s stature as the global semiconductor hotbed may remain unaffected for the years to come. The country accounts for more than 90 percent of the total advanced semiconductor production globally. And it may not drop much below that level anytime soon.

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According to the new report, TSMC isn’t the only company expanding its production in Taiwan. At least 20 new factories are under construction or recently completed across the island nation. United Microelectronics Corp. and Nanya Technology are among the companies expanding their ground presence in the country. Time will tell how the global semiconductor market evolves in the next few years as TSMC and Samsung compete fiercely.