Reuters reports that TSMC—Taiwan Semiconductor Manufacturing Company, the chip foundry making advanced processors for Apple, AMD, and Qualcomm—is beefing up its plans to build factories in Arizona while turning away from an advanced plant in Europe.
Last year, TSMC announced that it would invest $10-$12 billion to build a new 5 nm capable foundry near Phoenix, Arizona. According to Reuters’ sources, TSMC officials are considering trebling the company’s investment by building a $25 billion second factory capable of building 3 nm chips. More tentative plans are in the works for 2 nm foundries as the Phoenix campus grows over the next 10-15 years as well.
US President Joe Biden called for $50 billion to subsidize US chip manufacturing facilities, and the US Senate may take action on the item this week. Strong domestic manufacturing capacity is seen as critical, since US chip firms such as Nvidia and Qualcomm rely on Asian manufacturing facilities. TSMC would be competing with Samsung and Intel to secure these Biden administration subsidies.
Intel and Samsung are also increasing investment in US manufacturing facilities. Intel is building two new fabs in Arizona near its existing Chandler facility, and Samsung is building a $17 billion plant in Texas.
The European Union is also courting domestic chip manufacturing facilities—its industry commissioner Thierry Breton has spoken to officials from both Intel and TSMC. The talks seem to have gone better for Intel than TSMC. Intel CEO Pat Gelsinger proposed a $10 billion deal to build a new European factory, while TSMC officials say that although European possibilities aren’t ruled out, they have no plans to build there.
TSMC’s focus on the US rather than Europe may have a lot to do with the company’s market—in Q1 2021, 67 percent of its sales were in North America, 17 percent were in Asia Pacific, and only 6 percent came from Europe and the Middle East. The majority of TSMC’s European clients are auto manufacturers who buy cheaper and less-advanced chips.