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Semiconductor giant could be planning another $12B investment in Phoenix, reports say

Phoenix Business Journal

Wall Street Journal report said Wednesday that chip giant Taiwan Semiconductor Manufacturing Co. could be planning a multibillion-dollar expansion in Phoenix in addition to what’s it’s already planning to build.

TSMC plans to announce in the coming months that it will build a “cutting-edge” semiconductor factory, or fab, north of Phoenix, according to people who spoke with the Wall Street Journal and are familiar with the expansion plans.

The investment is also expected to be similar to the initial $12 billion that the company committed to two years ago, the report said. The expanded facility would manufacture 3-nanometer transistors, which the report said are some of the tiniest and lightning-fast currently possible.

The Phoenix Business Journal reported last year that TSMC’s first phase, which was announced in late 2020, will be worth $12 billion, and that the final investment in the facility, now under construction, will be even larger, potentially worth about $35 billion. The first phase of that fab is the largest foreign direct investment in the state’s history.

TSMC said in a statement to the Phoenix Business Journal that TSMC is now constructing a building to serve as a second fab at its Arizona site, leveraging resources from construction of its first fab for greater cost effectiveness.

“This building enables us to remain flexible for future expansion, but we have not arrived on a final decision on a second fab. In light of the strong customer demand we are seeing in TSMC’s advanced technology, we will consider adding more capacity in Arizona with a second fab based on operating efficiency and cost economic considerations,” a spokesperson for TSMC said in an emailed response.

The city of Phoenix said it continues to work closely with TSMC on the current construction project and will be ready to work with them if they develop additional capacity in Phoenix.

The semiconductor company has said it plans to hold a ceremony in Arizona in December to mark the arrival of the first batch of production equipment in the plant now under construction and that the facility would produce 5-nanometer chips there. It is also gearing up to produce more advanced 4-nanometer chips with larger capacity at the facility, the Wall Street Journal report said.

The planned facility that was previously announced is on track for starting mass production in 2024 and has so far hired hundreds of workers.

TSMC told the Business Journal in late May that it has completed structural work on the support buildings for the first major sector of Fab 21, including the office building. About half of the glass has also been installed in the office building.

Dozens of suppliers have also flocked to Arizona to support TSMC and other semiconductor manufacturers.

News of the potential expansion by TSMC comes after the state announced it would allocate $100 million in federal funds it was awarded to boosting the state’s semiconductor industry and after the CHIPS and Science Act was signed into law in August.

 


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