Apple chip partner, TSMC prepares to invest in second multibillion dollar factory in Arizona

Apple’s long-term semiconductor supplier, Taiwan Semiconductor Manufacturing Company (TSMC) is gearing up to invest in its second multibillion-dollar factory in Arizona, people familiar with the matter told The Wall Street Journal that TSMC is expected to invest $12 billion in the plant like the Phoenix plant it committed to in 2020.

TSMC is the world’s largest contract chip maker and Apple is its biggest client for processing chips for iPhone, iPad, Mac, and other devices. As part of its $100 billion investment over three years period to expand its production footprint, TSMC began construction of a $12 billion chip manufacturing unit in Arizona in June 2021 with the aim to begin production of 5nm chips in 2024.


TSMC’s second $12 billion plant in Arizona to produce 3nm chips 

Earlier this year, it was reported that TSMC’s Arizona plant was six months behind schedule due to labor shortages, the COVID-19 pandemic, and other issues. In spite of a rocky start, the Taiwanese manufacturer is preparing for the construction of its next mega project in the United States.

TSMC TSM 1.55%increase; green up pointing triangle plans in the coming months to announce it will build a cutting-edge semiconductor plant north of Phoenix, beside another chip factory that the company committed to in 2020, according to people familiar with the expansion plans. The scale of the investment is expected to be roughly similar to the $12 billion it committed two years ago, the people said.

TSMC - Apple

Maybe the latest political tensions between U.S. and China forced the manufacturer to take the step. Last month, President Joe Biden’s administration passed a strict law that prohibits exports of “advanced technology” to companies based in China. 

The new export law is viewed as an attempt by the government to increase the domestic production of semiconductors and to “hobble” China’s chip industry by cutting it off “from certain semiconductor chips made anywhere in the world with U.S. equipment.”

However, TSMC announced that it was granted a one-year exemption from the new US tech export law, along with Samsung and Sk Hynix. 

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