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Android taiwanese TSMC Arizona plans to build 12 billion semiconductor plant in US

Android taiwanese TSMC Arizona plans to build 12 billion semiconductor plant in US



Taiwan Semiconductor Manufacturing Co. Ltd. said it plans to build a $ 12 billion factory in Arizona, a clear victory for efforts by the Trump administration to roll back global technical supply chains from China.

Taiwan Semiconductor Manufacturing a decision to address US security concerns and move more high-tech manufacturing to the US.

The plant, which will be one of the largest inbound US investments on record and will create more than 1,600 jobs, with US President Donald Trump criticizing Chinese business practices and Beijing handling the novel coronavirus ahead of the November 3 presidential election Tried.

TSMC said on Friday that it would begin construction of its next major construction facility in 2021, to be completed by 2024. While investment has fallen short of previous spending on its state-of-the-art factories, it is a change for a company that now manufactures semiconductors for leading names Apple and Huawei Technologies, primarily like its home base in Taiwan.

Trump has long promised to bring manufacturing back from overseas and now a strong economic downturn brought on by the novel coronavirus is making a government-wide push to end US production and supply chain dependence on China. US Commerce Secretary Wilbur Ross called the deal "another sign that President Trump's policy agenda has led to a renaissance in American manufacturing."

As the world's largest and most advanced chips for other companies, TSMC plays an important role in the production of devices from smartphones and laptops to servers running the Internet. The decision to set up a plant in the western state barred by White House officials about the danger inherent in negotiating a deal with the administration to manufacture most of the world's electronics outside of US TSMC to produce US jobs and produce sensitive components. - Came after warning. According to people familiar with the situation, for domestic security reasons.

TSMC is a major supplier to American tech giants such as Apple In and Qualcomm Inc, as well as Chinese firms such as Huawei Technologies [HWT.UL], which Washington has put on a trade list. "This project is of critical, strategic importance to a vibrant and competitive American semiconductor ecosystem that enables leading US companies to create their state-of-the-art semiconductor products," said TSMC.

The Asian chipmakers US investment needs to break that delicate balance between its US customers and China's vast roster, which operates Taiwan as its territory independently. Beijing has belittled Washington because of its ambition to build a world-class domestic semiconductor industry, which could threaten the country's technological development.

Executives at TSMC, which operate plants in Nanjing and Shanghai and make chips that run into everything from 5G networks to US fighter jets, have insisted the company is neutral.

Sanford C. led by Mark Lee. Bernstein & Co. analysts wrote after the announcement, The scale and technology in China is similar to what TSMC suggested to balance between the US and China. Overall, this is probably the lowest price to remain neutral. To keep the TSMC scale and remain competitive, the U.S. And China requires both and this is the minimum cost to sustain this strategy.

While in the context of foreign investment in the United States, the plan is smaller than TSMC's standards. For 2020, the Capex plan of TSMC is $ 15–16 billion. The chipmaker from Taiwan said the plant has been in construction for more than nine years.

The envisaged facility is a small step in terms of global industry. Upon completion, it will crank out 20,000 wafers a month, one of the hundreds of thousands that TSMC is capable of from its main home base. And it will employ 5-nanometer process technology, a current standard that will likely be a few generations older than production starts in a few years.

A US Department of Commerce official said TSMC's decision to locate the plant in the United States led to "goodwill" at the department, following a law that would be implemented, severely reducing TSMC chip sales Will limit to Huawei.

Analysts at Credit Suisse said the proposed sanctions could threaten 14% of TSMC sales, escalating U.S.-China tensions and delaying the rollout of the next-generation 5G mobile network. Shares of TSMC, the world's most valuable semiconductor company with a market capitalization of $ 255 billion, rose more than 1.5% to Intel Corp on Friday morning with a 0.8% gain in the main Taiwan stock market.

JP Morgan analysts said in a note, While it is certain that we believe that TSMC announces US fab, at least in the near term, the threat of Huawei sanctions has been overcome.

The high cost of operating in the US may be a factor in the decision. A real state-of-the-art fab is expensive to manufacture: the company spent $ 500 billion ($ 17 billion) to build an advanced facility in the southern Taiwan city of Tainan that would supply new iPhones this year. It plans $ 16 billion in capital spending in 2020. The Arizona plant still requires approval from TSMC's board, which may hinge on incentives.

The power of its chips works closely with Apple's iPhone and iPhone maker TSMC, becoming the first to leverage new advances in its chip making processes. US Secretary of State Mike Pompeo said the chips at the new TSMC plant will power everything from artificial intelligence to 5G base stations to F-35 fighter jets.

Semiconductors play an important role in both consumer electronics and defense equipment. The largest share of the most advanced chips is made in Asia, which has caused concern among US officials as the strategic rivalry with China deepens on the origins of the deadly coronavirus. While Intel has major manufacturing operations in the United States, it supplies only its own chips rather than making them for external customers.

The Trump administration is negotiating with both Intel and TSMC to build a plant in the United States, and Intel said last week it was discussing with the Department of Defense about improving domestic sources for microelectronics and related technology Was.

“There is a cost gap, which is hard to accept at this point. Of course, we have — we are doing a lot of things to reduce that cost gap,” TSMC Chairman Mark Liu said on a recent analyst conference call.

If the federal government provides cash for the American plant, it would mark a change in policy and rhetoric from a Republican administration. Trump's White House has rarely supported such direct industrial intervention, which supports market dynamics. Foxconn in Wisconsin - a similar effort backed by the government with Apple's main iPhone assembler, has not yet been created as many jobs.

Despite the TSMC deal working independently on the TSMC deal, a person familiar with the matter said that TSMC's announcement is not expected to derail the Pentagon's efforts to expand the supply chain for microprocessors. Apple and Intel declined to comment.

TSMC stated that construction of the Arizona facility in 2021 will begin with targeted production to begin in 2024 and that it will be able to process 20,000 silicon wafers per month. Each wafer may contain thousands of individual chips. Investment will be made from 2021 to 2029. The Wall Street Journal first reported the latest details of TSMC's plans.