Taiwan Semiconductor Manufacturing Co is looking to pump tens of billions of dollars more into cutting-edge chip factories in the U.S. state of Arizona than it had previously disclosed, but is cool on prospects for an advanced European plant, people familiar with the matter told Reuters.
TSMC is the world’s most advanced chip-maker, and its investment plans are being closely watched amid a global chip shortage and new initiatives in the U.S. and Europe to subsidize semiconductor production. TSMC announced last year that it would invest $10 billion to $12 billion to build a chip factory in Phoenix.
Reuters this month reported that previously disclosed factory could be the first of up to six planned plants at the site. Now, company officials are debating whether the next plant should be a more advanced facility that can make chips with so-called 3-nanometer chipmaking technology compared to the slower, less-efficient 5-nanometer technology used for the first factory.
The more advanced 3-nanometer plant could cost $23 billion to $25 billion, one person familiar with the matter told Reuters. Details of TSMC’s plans for the additional factories at the Arizona site have not been previously reported.
In building the plants, TSMC is likely to compete against Intel Corp and Samsung Electronics Co Ltd for subsides from the U.S. government. President Joe Biden has called for $50 billion in funding to support domestic chip manufacturing, and the U.S. Senate could take action on that as early as this week.
Some government officials worry that subsidies for TSMC could help Taiwan, where the company would likely continue to conduct research and development, more than the U.S. But the U.S. subsidy plan does not exclude foreign firms.
Government and industry officials say a strong domestic chip-making sector is critical for the economy and national security. Although U.S. chip firms such as Qualcomm Inc and Nvidia Corp dominate their markets globally, most of their chips are manufactured in Asia.
A debate over how to boost chip-making is also playing out in the European Union. Intel has shown serious interest in those efforts, with chief executive Pat Gelsinger pitching a subsidy that could amount to $9 billion for a proposed “Eurofab” during a trip to Brussels last month.
EU industry commissioner Thierry Breton, who has championed the Eurofab idea, also spoke with TSMC’s Europe president, Maria Marced, last month. Although Breton publicly called the TSMC talk a “good exchange,” a second person familiar with the matter said the TSMC talks in Europe have gone “very poorly.”
A TSMC spokeswoman said that the company has not ruled out any possibilities, but that there are no plans for a plant in Europe.
Many of TSMC’s most lucrative customers, such as Apple, are U.S.-based, while its European customer base is made up of mostly of automakers buying less-advanced chips. In the first quarter, clients based in Europe and the Middle East only accounted for 6% of TSMC’s revenue, far outpaced by the by 67% of sales from North America and 17% from Asia Pacific.
Sources said TSMC has not ruled out building an older-generation chip plant in Europe to serve auto customers.