The world’s biggest chip making company, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), has announced that it is to invest heavily in a new multibillion-dollar semiconductor plant in Arizona. TSMC is the world's biggest contract chipmaker, with a revenue of US$18bn and an impressive portfolio of customers, including tech giants such as Apple. Founded in 1987, the first semiconductor foundry remains the reference point in manufacturing efficiency.
In 2015, TSMC's managed capacity reached over 9m 12-inch equivalent wafers, while also operating three advanced 12-inch wafer fabs, four eight-inch wafer fabs, one six-inch wafer fab and two backend fabs.
The USA has sought to encourage manufacturers back to the country in recent years as a way of preventing any future supply chain disruption, such as that experienced during the COVID-19 pandemic.
This promotion of the semiconductor manufacturing industry has come right from the very top of the government, with President Joe Biden stating “America invented the computer chip when we went to the Moon. Then we led the industry for decades. But then something happened: America stopped investing in America. American companies went overseas for cheaper labour and American manufacturing got hollowed out, despite leading the world in research and design of new chip technology. We knew we had to do something to change that.”
It seems a given to note that this new factory is a step in the right direction for US manufacturing.
In a statement announcing the new plant, Rick Cassidy, Chief Executive of TSMC Arizona, underlined that TSMC is keen to keep costs down, build a skilled and efficient workforce and manage a reliable supply chain.
“In terms of cost economics, our consideration was the cost difference between the United States and Taiwan — how we could level the playing field between the potential investment site and the locations where we are already operating,” he said.
Unfortunately storm clouds could potentially be on the horizon as threats of invasion by Chinese President Xi Jinping will certainly cause disruption in the supply chain. Many people in the industry fearsthat Jinping may want to invade the island in order to take over the semiconductor industry and use it to boost the Chinese economy.
Some have even suggested that a scorched earth policy should be enacted if an invasion does take place, declaring that the semiconductor factories in Taiwan should be destroyed by the Taiwanese army instead of letting them slip into the hands of the invader.
However, Chen Ming-tong, director-general of Taiwan's National Security Bureau, sounded a more cautious note and deemed this to be unnecessary.
"If you understand the ecosystem of TSMC, the comments out there are unrealistic," said Ming-Tong. "TSMC needs to integrate global elements before producing high-end chips. Without components or equipment like ASML's lithography equipment, without any key components, there is no way TSMC can continue its production. Even if China got a hold of the golden hen, it won't be able to lay golden eggs."
