In Phoenix, a Taiwanese chip giant is building a hedge against China

TSMC is by far the world’s largest “foundry,” as the industry calls such services, and has recently boasted the most advanced manufacturing technology. Besides Apple, its big customers include Amazon, Qualcomm, Nvidia, and Advanced Micro Devices.

These companies have not publicly expressed concerns about the concentration of chip manufacturing in Taiwan, which faces risks linked to earthquakes and Drought In addition to the claims of China. But the presence of top executives from several companies at Tuesday’s event indicated strong support for having more key ingredients for their products manufactured closer to home.

Commerce Secretary Gina Raimondo raised concerns about reliance on overseas production at Tuesday’s event.

“At the moment in the United States, we don’t make any of the most sophisticated, advanced, sophisticated chips in the world,” she said. This is a national security issue, a national security vulnerability. Today, we say we’re changing that.”

The Phoenix expansion plan shows that customer pressure is having a bigger impact on TSMC, which has long argued that concentrating production on giant “gigafabs” in Taiwan was the most efficient, industry analysts and executives said.

TSMC softened this position somewhat in 2020 by agreeing to Factory opened in Phoenix. But the company has set a limit on the level of production technology in the factory, which is assessed by measuring how small a company can make key parts from individual transistors on a chip. The smaller those dimensions — measured in nanometers, or billionths of a meter — more transistors can be packed onto a piece of silicon.

The company originally set the technology level at the Phoenix site at five nanometers. That was an advance over most chips in 2020, but behind the level that TSMC will produce in Taiwan in 2024, when the US factory is about to open. The new plan will upgrade the factory to use four-nanometer technology, which Apple was the first to adopt. TSMC said the second plant, which is expected to start operating in 2026, will be capable of producing three-nanometer chips.