TSMC to build 5nm Plant in the U.S. with 100k wafers/month output: Report

The Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest chipmaker, as part of its efforts to set up a manufacturing facility in the U.S., is planning to build a total of six factories within the country.

These factories will be part of TSMC’s planned facility in Arizona, according to internal rumours sourced by UDN, and the factories will contribute to what is being termed as a ‘Mega Fab’ inside the U.S.

TSMC’s Six Factories Will Produce 12-inch Wafers, With Company Incentivizing Talent To Move To The U.S.

The plant in Arizona will commence mass production in 2024 by the production of semiconductors manufactured on the 5nm process node, according to publicly available details shared by TSMC’s management. What we know right now, according to the data, is that this 5nm node is currently TSMC’s latest process, and it has several variants which tweak the design parameters to offer more power or performance efficiency. A whopping 20,000 wafers/month will be produced with an investment of $12 billion.

On the other hand, if today’s rumours hold true, then the plant’s expenditure and output will see a staggering increase over what TSMC is currently planning. The details of UDN’s report reveal that the six factories will be responsible for manufacturing 12-inch wafers, and total expenditure for construction will equal NT$ 1 trillion (Taiwanese dollar) or $36 billion (USD). Additionally, output for the plant will increase to 100,000 wafers produced per month, five times over the current estimate.

TSMC employees seem to be the source of this rumour as the company encourages them to move to the U.S. to staff the facilities. Should TSMC succeed in building the mega chip factory, the facility will be the largest non-American chipmaking facility in the U.S.

In February, a board of directors meeting of the TSMC was held, the management authorized $12 billion in capital expenditure. Amongst other uses, it was assigned for constructing new plants and installing and upgrading advanced process node technologies. The chipmaker is currently facing a double whammy as Taiwan is going through a water shortage, and TSMC is also catering to a higher demand for automotive chips in the wake of China’s economic recovery from the ongoing COVID-19 pandemic.

It is still uncertain whether the rumoured plans stem from the recently passed CHIPS for America title in the National Defense Authorization Act 2021 (NDAA). According to WCCFTECH, “The act promises up to $3 billion in funds for individual projects aimed towards increasing American capacity to manufacture chips, with higher amounts also being available with greater scrutiny. This additional funding is available if the project is capable of demonstrating that it will not only increase U.S. global chip competitiveness but also improve American national security.”

In Taiwan, TSMC is currently busy building a more advanced 3nm facility, which is expected to become operational next year. A 5nm capacity increase is also rumoured to see the company beefing up output by 70% to 120,000 wafers/month by the end of this year.

As water is a major component of the chipmaking process, TSMC’s plans to build the Arizona fab will be aided by $205 million in city funds, which will be aimed mostly towards ensuring that the facility will have access to adequate water for its production.

According to research firm TrendForce, the $12 billion capital expenditure for the fab will be spread over 12 years. The research firm also believes that the Taiwanese company will post a 25% year-over-year sales increase for the first quarter of this year, with total sales standing at $13 billion for the quarter.

This will enable TSMC to secure a 56% market share in the pure-play foundry business, and it is at the high end of its revenue estimate of $12.7 – $13 billion for the quarter. TrendForce believes the 5nm node will account for 20% of this revenue, and the older 7nm node will lead through a 30% share.

SOURCE