Taiwan Semiconductor Manufacturing Co (TSMC) on May 15 announced that it would build an advanced semiconductor fab that would mainly deploy 4-nanometer process technology in Phoenix, Arizona.
Most Taiwanese are not aware that Phoenix has become an important chip manufacturing center in the US. Although South San Francisco in the Bay Area is known as Silicon Valley, the tech industry there today has little to do with silicon, or chip, production, except for a few old Intel fabs. Instead, it is more focused on upstream semiconductor industries, such as the Internet, biotech, green energy and artificial intelligence.
Apple, for example, designs its own mobile phones; Google designed a tensor processing unit for artificial intelligence (AI); Nvidia’s graphics processor has been widely adopted by AI, blockchain and bitcoin companies around the world in the past few years. These upstream companies own highly innovative technologies and they basically outsource all their manufacturing to companies like TSMC or United Microelectronics Corp (UMC).
TSMC, which has more than nine advanced IC fabs in Taiwan, is the world’s largest contract chipmaker with the most advanced manufacturing quality. However, in other US high-tech sectors, such as defense, space technology, medical equipment, 5G and self-driving vehicles, plants capable of supplying small batches of high-tech chips are still in demand.
TSMC’s decision to build a fab in the US is clearly based on the huge potential it sees for providing its professional services locally. Regardless of how much political pressure from the US and Taiwanese governments was behind TSMC’s decision, it is a milestone in the internationalization of Taiwan’s technology industry. Past governments have encouraged Taiwanese companies to make global deployments, but without the leading companies taking the lead, who would dare to go it alone?
TSMC aims to start detailed plans for its Phoenix facility next year and to complete construction in 2022-2023, with 4-nanometer chip production targeted to begin in early 2024.
TSMC has a fab in the Southern Taiwan Science Park that has started mass production of 5-nanometer chips. Its plan to set up a more advanced fab deploying 2 to 3-nanometer process technology in Kaohsiung’s Luzhu Science Park has already been approved by the government.
With the emergence of a large number of new technologies, demand for high-end applications is expected to focus on 4 to 7-nanometer chip technology within the next five to seven years. TSMC’s main competitors, such as Samsung and Intel, are doing their utmost to catch up, making 4 to 7-nanometer technology their focus for the next 10 years.
TSMC’s bold plan to build its second 4 to 5-nanometer fab on US soil to be closer to potentially huge new customers is a wise and timely move. Building an advanced fab in the US is based on several important strategic considerations.
First, separating production sites and capabilities is an attempt to reduce the risk of becoming involved in the intensifying US-China technology dispute.
Second, continuing to boost investment in high-end process technologies would help TSMC maintain its leading status in the industry in the long term.
Third, top US university laboratories are leading the world in the research and development of new materials, precision optics, communication technology and digital healthcare, providing geographical proximity for the TSMC US fab to develop next generation 1-nanometer technology.
Sustainable development of an enterprise requires continuous efforts by generations of talent. TSMC founder and former chief executive Morris Chang (張忠謀) achieved great things, and the two co-CEOs who took over are also doing a good job.
It has been said that TSMC is a black hole that sucks in Taiwan’s high-end talent as one of every two graduates from the master’s or doctoral programs of the nation’s four top technology universities end up working for TSMC.
However, this top talent, who are now over the age of 40 and have been trained by TSMC for more than 15 years, are not like their predecessors from the two previous generations, who studied in the US and had experience working in large global companies. The question now is how to better equip them to lead this world-leading enterprise. Transferring them to Phoenix would clearly be a feasible shortcut to giving them the training and experience they need.
From another perspective, building TSMC’s second 4-nanometer plant in Phoenix would release 3,000 to 4,000 graduates from Taiwan’s elite universities to the job market. This would boost the workforce needed by other enterprises with high potential. This group represents Taiwan’s top science and engineering talent, and they would be a great human resources asset to Taiwan and a positive force to transform and upgrade the nation’s industry and enhance its international competitiveness.
Tu Tze-chen is former head of the Industrial Technology Research Institute’s Knowledge-based Economy and Competitiveness Center.
Translated by Lin Lee-kai
From the Iran war and nuclear weapons to tariffs and artificial intelligence, the agenda for this week’s Beijing summit between US President Donald Trump and Chinese President Xi Jinping (習近平) is packed. Xi would almost certainly bring up Taiwan, if only to demonstrate his inflexibility on the matter. However, no one needs to meet with Xi face-to-face to understand his stance. A visit to the National Museum of China in Beijing — in particular, the “Road to Rejuvenation” exhibition, which chronicles the rise and rule of the Chinese Communist Party — might be even more revealing. Xi took the members
A Pale View of Hills, a movie released last year, follows the story of a Japanese woman from Nagasaki who moved to Britain in the 1950s with her British husband and daughter from a previous marriage. The daughter was born at a time when memories of the US atomic bombing of Nagasaki during World War II and anxiety over the effects of nuclear radiation still haunted the community. It is a reflection on the legacy of the local and national trauma of the bombing that ended the period of Japanese militarism. A central theme of the movie is the need, at
The Chinese Nationalist Party (KMT) and the Taiwan People’s Party (TPP) on Friday used their legislative majority to push their version of a special defense budget bill to fund the purchase of US military equipment, with the combined spending capped at NT$780 billion (US$24.78 billion). The bill, which fell short of the Executive Yuan’s NT$1.25 trillion request, was passed by a 59-0 margin with 48 abstentions in the 113-seat legislature. KMT Chairwoman Cheng Li-wun (鄭麗文), who reportedly met with TPP Chairman Huang Kuo-chang (黃國昌) for a private meeting before holding a joint post-vote news conference, was said to have mobilized her
Before the Chinese Communist Party (CCP) and its People’s Liberation Army (PLA) can blockade, invade, and destroy the democracy on Taiwan, the CCP seeks to make the world an accomplice to Taiwan’s subjugation by harassing any government that confers any degree of marginal recognition, or defies the CCP’s “One China Principle” diktat that there is no free nation of Taiwan. For United States President Donald Trump’s upcoming May 14, 2026 visit to China, the CCP’s top wish has nothing to do with Trump’s ongoing dismantling of the CCP’s Axis of Evil. The CCP’s first demand is for Trump to cease US
RSS