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Taiwan's TSMC To Set Up Chip Factory In US At Cost Of $12 Billion

Taiwan's TSMC To Set Up Chip Factory In US At Cost Of $12 Billion
Taiwan Semiconductor Manufacturing Co Ltd, (TSMC) has announced the setting up of a chip factory in Arizona, United States, with an investment of $12 billion. The company called this decision its way of establishing a "strong partnership" with the US government.
TSMC’s decision, the largest contract manufacturer of computer chips and a major vendor for Apple Inc., was taken at a time when the US president Donald Trump and his administration us trying to bring in more foreign and domestic companies to manufacture in the US. 
The Taiwanese company said in a statement that the most sophisticated 5 nanometer chips will be manufactured at the new US facility and will provide employment to as many as 1,600 jobs. The company already has an older chip facility in the Washington state.
Construction work of the factory would start in 2021, TSMC said in a statement, and after completion, the top processing capacity of the facility will be up to 20,000 silicon wafers per month. Thousands of individual chips are contained in each wafer.
"This project is of critical, strategic importance to a vibrant and competitive U.S. semiconductor ecosystem that enables leading U.S. companies to fabricate their cutting-edge semiconductor products within the United States...," TSMC said, calling it a "strong partnership with the U.S. administration".
The news of the new factory pushed up the share price of the company by 1.5 per cent in Taiwan. TSMC is the most valuable chip manufacturing company in the world with a market capitalization of $255 billion which is more than that of Intel Corp.
This move by the Taiwanese company comes at a time when the US Commerce Department said that it had drafted a new rule which, if implemented, will significantly restrict the ability of the Taiwanese company to sell its chips to tainted or blacklisted Chinese telecom equipment making companies including Huawei, which one of the important customers for TSMC. According to a report published in The Washington Post quoting sources in the US Commerce Department, the department believes that the decision of TSMC to invest in the country has been able to generate "good will" with the department and the US administration.
Most of the semiconductor chips used in Apple's iPhones are from TSMC and the US smartphone maker works closely with the Taiwanese company chip manufacturer to become the first to take advantage of new advances in its chip-making processes.
Semiconductors are a crucial part of equipment for both the consumer electronics segment and defense departments. A large portion of the most advanced chips are manufactured in Asia which has been a cause of concern for the US administration even as the strategic rivalry with China gets deeper with controversy over the origins of the deadly coronavirus.
Even though majority of Intel’s manufacturing operations are in the US, it supplies only its own chips instead of making them for outside customers.

Christopher J. Mitchell

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