U.S. investment will not hurt TSMC industry lead: economists
Taipei, May 16 (CNA) Taiwan Semiconductor Manufacturing Co.'s plan to build an advanced wafer foundry in Arizona will not undercut the technology edge of the company's base in Taiwan, according to economists.
"When the planned Arizona plant using the 5 nanometer process starts production in 2024, TSMC will have advanced to the 2 nm process [in Taiwan] by then," said Liu Pei-chen (劉佩真), a research fellow at the Taiwan Institute of Economic Research (TIER).
"Even if the U.S. has the plant run by TSMC, Taiwan is expected to remain competitive as the Taiwanese semiconductor sector will own higher technologies," Liu said.
On Friday, TSMC announced plans to invest US$12 billion to build a 5 nm process wafer fab in Arizona, saying construction of the plant is scheduled to start in 2021 and the facility is expected to start mass production in 2024.
The 5nm process is TSMC's most advanced production process at present, and it is currently developing more sophisticated 3nm process technology that could start mass production in 2022.
Liu said TSMC's 5nm process plant in Taiwan is expected to roll out 80,000 wafers a month by the end of this year, four times the capacity of the planned Arizona facility, and that is likely to grow next year.
At the same time, the US$12 billion investment in Arizona falls short of TSMC's annual capital expenditure ranging between US$15 billion and US$16 billion a year.
"So whether you look at capex or output," TSMC and, by extension, Taiwan's semiconductor industry, should maintain their lead, Liu said.
As for why TSMC selected Arizona as the venue for the plant, Stephen Su (蘇孟宗), head of the government-sponsored Industrial Technology Research Institute's Industrial Economics and Knowledge Center, said the state already has a semiconductor cluster featuring Intel Corp. and NXP Semiconductors, among others.
As a result, TSMC will have a supply chain to work with and will not have to start from scratch, Su said.
Arizona also has the advantages of dry weather and few natural disasters, such as earthquakes, and the higher labor costs in the U.S. are not expected to be a problem because foundries are highly automated through cloud-based technologies, Su said.
Meanwhile, Liu said the proposed investment in Arizona was probably a necessary move for TSMC because U.S.-based businesses account for about 60 percent of its sales, and rising trade tensions between the U.S. and China may force producers to move some production to the U.S.
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