TSMC Confirms It Will Manufacture Cutting Edge 3-Nanometer Chips At Its Semiconductor Fab Factory In Arizona, U.S

TSMC (Taiwan Semiconductor Manufacturing Company), the world's largest contract chip manufacturer that pioneered the pure-play foundry business model, has announced plans to produce its most advanced 3-nanometer chips in the U.S. as part of the company's phase 2 plan at its plant in Phoenix, Arizona.

The company founder Morris Chang, widely regarded as "the godfather" of Taiwan's semiconductor industry, confirmed plans to bring its currently leading edge 3-nanometer (one billionth of a meter) process technology to its Arizona fab factory, advancing beyond the 5-nanometer technology it will deploy in the first phase of production scheduled to start in 2024.

Asked during a press conference in Taipei whether TSMC plans to produce 3-nanometer chips in the U.S., the company founder Morris Chang said: "Yes, after it begins producing 5-nanometer chips.".

"The phase 1 plan at the Phoenix plant is to manufacture 5-nanometer chips and the production of 3-nanometer chips would be in phase 2," he added.

U.S. Commerce Secretary Gina Raimondo will attend a ceremony on Dec 6 to mark equipment installation at a new $12 billion semiconductor facility near Phoenix in Arizona built by TSMC. TSMC will start making 5-nanometer chips in 2024 and produce 20,000 wafers each month.

The company first unveiled its plan to set up a semiconductor production facility in the U.S. in May 2020. The construction work started in June 2021.

While most of TSMC's 12 fabs are in Taiwan, the company has been under pressure to diversify its production base due to geopolitical tensions and moves by the U.S. to build domestic capability in chip production.

As the world's largest and most sophisticated contract chipmaker, TSMC produces the smallest, densest, and most power-efficient chips for fabless chipmakers like Advanced Micro Devices, Qualcomm, Nvidia, and Apple. The company's dominant position in 7-manometer and 5-nanometer nodes gives its pricing power currently unmatched by rivals Samsung and Intel.

The Taiwanese chipmaker, which launched the 5-nanometer process in 2020, is scheduled to set to commercial production of the 3-nanometer process at its fab in Tainan city in Taiwan.

TSMC is following a different approach in developing its 3-nanometer technology by adopting the FinFet transistor structure, which it expects to deliver a high level of technology maturity, performance and cost for its customers.

The company's share prices have been soaring since Warren Buffet's Berkshire Hathaway Inc disclosed on Nov 14 that it had purchased more than $4.4 billion of stock in TSMC.

In a regulatory filing to U.S. authorities, Berkshire said it owns about 60.1 million American depositary shares of the semiconductor chip manufacturer. The investment in TSMC is significant, considering that billionaire Buffet usually avoids foraying into the technology sector.