TSMC Receives Taiwan’s Approval for Advanced 2nm Chip Production in the US

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TSMC’s Potential Move into 2-Nanometer Chip Manufacturing in the U.S.

The Taiwan Semiconductor Manufacturing Company (TSMC) is on the verge of a significant expansion, having reportedly obtained the Taiwanese government’s preliminary approval to establish 2-nanometer chip manufacturing operations in the United States. This follows TSMC’s recent investment in Arizona, where it is constructing advanced chip production facilities supported by financial incentives from the CHIPS and Science Act. According to TSMC’s projected timetable, the fabrication plants at this site are slated to begin producing cutting-edge chips, including 2-nanometer technology, by the end of the decade.

Policy Shift: Taiwan’s Stance on Overseas Production

A recent article by the Taiwanese news outlet UDN highlights a pivotal change in governmental policy, now allowing Taiwanese firms to determine their own capabilities for overseas chip production. Previously, companies were mandated to maintain production that was one or two generations ahead of their international facilities. This new approach reflects a more flexible strategy aimed at adapting to global market demands.

The Economic Implications for TSMC

According to J.W. Kuo, Taiwan’s Minister of Economic Affairs, TSMC’s undertaking of 2-nanometer chip production in the U.S. will entail substantial financial investment—potentially reaching $30 billion for facility setup and equipment acquisition. Kuo emphasized that the hefty expenditures associated with such a project would necessitate cautious deliberation on TSMC’s part regarding overseas production expansion.

Responses to Questions on Domestic vs. International Production

When questioned about the implications of the new policy for TSMC’s Arizona plant, Minister Kuo acknowledged the evolution of industry practices, signaling that the decision now resides with TSMC. Additionally, he suggested that conditions had changed significantly, contrasting earlier mandates on domestic production leadership.

Future Production Plans and Global Semiconductor Landscape

Previous comments from the Minister of Science and Technology, Wu Cheng-wen, indicate that TSMC may begin its 2-nanometer chip production in the U.S. as early as 2025. With mass production of this technology expected to launch later this year, there are speculations about earlier trial runs at TSMC’s facility in Kaohsiung. Wu assured stakeholders that despite any potential moves abroad, TSMC’s R&D operations would remain firmly established in Taiwan, thereby maintaining the island’s leadership in semiconductor technology.

Moreover, he dispelled fears regarding a decline in Taiwan’s global standing in chip technology by highlighting America’s ongoing prowess in chip design and intellectual property, elements that continue to keep the U.S. at the forefront of the semiconductor industry.

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