TSMC is not planning to move to China denying all rumors of the action

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Earlier rumors surfaced online stating that the Taiwan Semiconductor Manufacturing Company (TSMC) plans to shift some of its chip manufacturing capacity to China. However, Taiwan’s Ministry of Economic Affairs has denied the rumors which speculated that TSMC would shift to its facility in Nanjing, China, as it faces water and electricity shortages in Taiwan.

However, if we think logically then the shift would involve the capacity relocation of 12,000 wafers for mature chipmaking processes such as the 28nm chip node. The Taiwanese Ministry further stated that the company has no plans to relocate any of its existing chipmaking capacity to China due to power or water constraints.

As we know, the island country of Taiwan is facing a historic drought this year as it anxiously awaits typhoons, and a power outage in the Tainan sector disrupted TSMC’s operations earlier this month, which resulted in the loss of millions of dollars. According to sources, the company has now started to procure groundwater and water tankers to ensure its production is not affected by the drought.

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TSMC moving to china will be disadvantageous for the company for now as it has started building a chip fabrication plant in the island’s Tainan sector, and this plant will build chips on the leading-edge 3nm process node.

The Taiwanese government has started taking actions to ease the water availability trouble of the fab, however, that is not the only trouble which the company is experiencing as of now. As we all know that TSMC is also currently facing excess demand from the automotive sector following the market recovery in China.

Currently, the company is operating at its over 100% capacity, however, the growing demand from the automotive sector coupled with an increase in demand from the consumer electronic sector has raised concerns for the company.

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