Chip giant TSMC reportedly set to invest another $12 billion into a new Arizona fab

Taiwan Semiconductor Manufacturing Co (TSMC) is reportedly set to invest billions of dollars into another semiconductor plant in Arizona.

The chipmaker is set to announce it will build a new chip plant near Phoenix, beside the factory it invested into in 2020, according to a report from the Wall Street Journal (WSJ). TSMC is expected to make an investment of around $12 billion, mirroring the amount it poured into the first factory two years ago.

The company, which accounts for around 50% of Taiwan's chip foundry market according to Trendforce, is reportedly planning on making 3nm transistors at this new factory. TSMC told the WSJ it’s making a building which could serve as a secondary fab at its Arizona site. It's thinking about adding more chip capacity but hasn’t made a final decision.

TSMC confirmed in 2020 it would build a $12 billion chip factory in Arizona. At the time, the company was set to begin construction of the fab in 2021, with production expected to start in 2024. The factory is set to produce 5nm chips, manufacturing 20,000 wafers per month.

Last year, it was reported the chip giant made plans to build an additional five chip plants on the same site. The plan was to build six factories in the following three years, representing a shift in the company’s manufacturing from Taiwan to the US.

This comes at a time when the US is aiming to attract more investment from chip companies in order to secure its domestic supply chain of these valuable components. US House speaker Nancy Pelosi visited Taiwan in August 2022 and her delegation reportedly met with TSMC chairman Mark Liu to discuss the passage of the CHIPS act in the US.

The legislation is important for chip companies as they're able to receive subsidies from the US government and tax incentives for building new chip factories. The act also states companies that receive the subsidies won’t be able to boost the production of chips in China.

During Pelosi’s visit to the island, a number of Taiwanese government websites were hit by cyber attacks, which seemed to come from China and Russia. Taiwan has accused China of increasing cyber attacks against the island since 2016, with some officials stating that the country faces around five million attacks a day.