TSMC’s supplier, Jiangxi Hantang System, expects to equip U.S. Plant in September 2022

The Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest and most advanced contract chipmaker, plans of establishing a semiconductor fabrication plant in Arizona, USA, moved forward on Tuesday as its cleanroom equipment supplier received a contract qualification for the facility.

The Arizona plant will be capable of manufacturing semiconductors on the currently leading-edge 5nm process node. TMSC’s equipment supplier for its fab, Jiangxi Hantang System Integration Co. Ltd., revealed the details in a conference with executives emphasizing the costs of building chip facilities in the U.S.

Jiangxi Hantang System Expects To Conclude Equipment Price Negotiations By July

According to Hantang, by September next year, it should start installing equipment in the Arizona fab, based on its previous experience of dealing with TSMC and other customers, with orders from TSMC yet to be finalized. By July this year, it expects orders for the equipment to be finalized and plant construction expected to commence by the end of this year.

Hantang informed that it plans to send more than 20 of its top engineers to the U.S. for the Arizona fab, along with applying for 150 subcontractors. Additionally, to bring down costs, the company also plans to hire 200 personnel in the U.S., including subcontractors and engineers.

Hantang chairman Mr. Chen Chaoshui further elaborated on the cost saying that building a plant in the U.S. is expensive when compared to costs in Tawain. According to the executive, “If the United States builds one factory, Taiwan can build three or four factories.” Previously, Taiwan Power Semiconductor Manufacturing Co.’s Huang Chongren commented in the aftermath of Intel Corporation’s $20 billion Arizona investment that six Taiwanese engineers can be paid by the salary of a single American engineer.

The American government, under its defense spending bill, has authorized incentives for companies looking to establish chipmaking plants in the country. This has generated fresh fervor in the space, with America’s own Intel Corporation joined by South Korean tech giant Samsung Electronics announcing plans for American chipmaking facilities.

Semiconductor shortages in the wake of the ongoing pandemic have increased concerns about supply chain integrity not only in the U.S. but across the European Union as well.

In 2024, TSMC’s Arizona fab is expected to commence mass-producing chip on the 5nm node with 20,000 wafers per month planned capacity. According to WCCFTECH, “concerns about the plant’s ability to churn out leading-edge tech are present because the current progress in chip manufacturing processes results in a node shrinkage every two years.” 

During TSMC’s chief executive officer Dr. C.C. Wei’s latest earnings conference, he that his company might expand its plans to build a fab in Nanjing, China. Dr. Wei reasoned that this expansion is on customer demand, making us wonder whether a similar expansion for the Arizona fab might also be on the cards if TSMC’s customers demand it. Apple, NVIDIA, Qualcomm, and Intel are just some of the big-ticket tech firms that get their chips from TSMC.

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