TSMC to Unveil Plans for Another US Chip Plant, WSJ Says

Taiwan Semiconductor Manufacturing Co. aims to build another chipmaking plant in Arizona on top of a $12 billion complex it’s already committed to.

TSMC, which is the world's largest contract chipmaker, is building a $7 billion facility in Japan. (Bloomberg)

Taiwan Semiconductor Manufacturing Co. aims to build another chipmaking plant in Arizona on top of a $12 billion complex it's already committed to, the Wall Street Journal reported, citing people familiar with the plans.

The world's largest contract chipmaker will announce its intention to establish another facility north of Phoenix, adjacent to the factory under construction, the Journal reported. The new investment should be similar to the first project's, it added. Representatives for the company didn't respond to requests for comment.

The Biden administration is trying to attract investments in US chipmaking, part of efforts to counter China's ambitions and secure components vital to national security. That effort accelerated after widespread shortages that began around late 2020 and 2021 drove home how chips were central to the production of everything from cars to smartphones.

Washington, which is dangling incentives of some $50 billion for local projects, has hailed TSMC's Arizona expansion as a triumph in endeavors to bring advanced chipmaking back to America. But the Taiwanese company has said it cost much more to fabricate semiconductors in the US, though that higher expense was manageable with state support.

TSMC, whose production sites are mostly in Taiwan, has started to diversify over the past year or so to help meet demand in major countries seeking to bolster domestic semiconductor production. It joins rivals such as Samsung Electronics Co., which is also establishing a $17 billion fab in Texas.

The company is building a $7 billion facility in Japan, and is also in early talks with the German government about potentially establishing a plant in the European country, Bloomberg News has reported.

A major expansion to TSMC's US plans would boost the Biden administration's overall efforts to ensure the country remains ahead of China in the semiconductor race.

Apart from driving incentives for local chipmaking, the US has imposed a plethora of restrictions on the shipment of advanced technology to China, aiming to throttle the flow of chips that aid Beijing's military and tech sector.

Xi Jinping, in a landmark address last month, pledged tech self-reliance to prevail in a battle with the US for technological supremacy -- which many took as a sign Beijing will redouble policy and financial support for sectors such as AI and chips.