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Taiwan Semiconductor Manufacturing Co Ltd, the world’s largest contract maker of computer chips, is expected to announce plans to build an approximately $ 12 billion advanced chip factory in Arizona, according to people familiar with the matter.
The announcement, expected on Thursday, coincides with an effort by the President Donald Trump administration to bring more foreign manufacturing to the United States.
One of the sources said the plant will create up to 1,600 jobs and produce the most sophisticated 5-nanometer chips. TSMC also has an older chip facility in Washington state.
TSMC did not immediately respond to a request for comment. The Wall Street Journal first reported TSMC’s plans.
The move comes after the Commerce Department drafted a rule that, if implemented, could severely restrict TSMC’s chip sales to Chinese blacklisted telecommunications equipment maker Huawei, a key customer. One of the two sources, a Commerce Department official, said the decision to locate the plant in the United States generates “goodwill” in the department.
TSMC is a major supplier to Apple Inc. The Taiwanese company manufactures the chips that power Apple’s iPhones, and the iPhone maker works closely with the chip maker to become the first to take advantage of new advancements in its chip manufacturing.
Semiconductors play a key role in both consumer electronics and defense equipment. The vast majority of the most advanced chips are made in Asia, which has caused concern among US officials as the strategic rivalry with China deepens over the origins of the deadly coronavirus.
While Intel Corp has major manufacturing operations in the United States, it only supplies its own chips rather than manufacturing them for external customers.
The Trump administration has been in talks with Intel and TSMC to build a plant in the United States. One of the people said that Intel would have been a problematic choice, because its customers would see Intel as a provider and a rival.
Last week, TSMC said it had been considering the United States as a location for a new factory, but that “there was still no concrete plan.”
One of the sources said Commerce had spearheaded talks with TSMC about the potential plant for about two years.
Last week, Intel said it was in talks with the Defense Department about improving national sources of microelectronics and related technology.
The department had been working with companies to strengthen the microprocessor supply chain, a person familiar with the matter said. The TSMC announcement is not expected to derail the Pentagon’s efforts, despite the Commerce Department working on the deal with TSMC independently, the person said.
Apple and Intel declined to comment. – Reuters
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