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Taiwan Semiconductor Manufacturing to manufacture next-generation chips in the United States at the behest of Apple

Taiwan Semiconductor Manufacturing to manufacture next-generation chips in the United States at the behest of Apple
FILE PHOTO: The Taiwan Semiconductor Manufacturing Co (TSMC) logo is seen at its headquarters, in Hsinchu, Taiwan, January 19, 2021. REUTERS/Ann Wang/File Photo

Taiwan Semiconductor Manufacturing Co. will offer advanced 4-nanometer chips when its new $12 billion plant in Arizona open in 2024, an update to its earlier public statements, after US customers including Apple Inc. pressured the company to do so, according to people familiar with the matter.

TSMC is expected to announce the new plan when the president Joe Biden and the Secretary of Commerce, Gina Raymondor, visit Phoenix for a ceremony next Tuesday, said the sources, who asked not to be identified because the matter is private.

The TSMC factory had been slated to manufacture 5-nanometer semiconductorsa standard that will be far from the cutting edge by 2024. The Taiwanese company is also will commit to adding a second plant nearby, which will make even more advanced 3-nanometer chipsthey explained.

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TSMC previously said it would make 20,000 wafers a month at the Arizona facility, though production may increase from those original plans, they said. Apple will use about a third of production as production begins.

TSMC's factory had been slated to make 5-nanometer semiconductors, a standard that will be far from the cutting edge by 2024. The Taiwanese company will also commit to adding a second plant nearby, which will make even more advanced 3-nanometer chips, they explained.  Photographer: Maurice Tsai/Bloomberg
TSMC’s factory had been slated to make 5-nanometer semiconductors, a standard that will be far from the cutting edge by 2024. The Taiwanese company will also commit to adding a second plant nearby, which will make even more advanced 3-nanometer chips, they explained. Photographer: Maurice Tsai/Bloomberg

Apple and other big tech companies rely on TSMC for their chip-making needs, and the switch means they’ll be able to get more of their processors from the United States. Apple CEO Tim Cook previously told employees that his company plans to source chips from the Arizona plant. He is scheduled to attend the event next week, sources confirmed.

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A representative for TSMC declined to comment. Apple did not immediately respond to a request for comment.

Supply chain disruptions and trade tensions with China have spurred efforts to bring more manufacturing to the United States and Europe. US lawmakers also approved the Chip and Science Act this year, offering $50 billion in incentives for companies looking to build semiconductors in the country. TSMC is likely to receive billions in subsidies.

The possibility of China taking over Taiwan has also generated worries about reliance on that region for much of the semiconductor industry’s current supply. Island-based TSMC is the global provider of chips that power everything from smartphones to electric vehicles. Most of its production is still centralized in Taiwan.

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  About a third of the production will be used by Apple as production begins.  REUTERS/Aly Song/File Photo
About a third of the production will be used by Apple as production begins. REUTERS/Aly Song/File Photo

In addition to Apple, TSMC customers like Advanced Micro Devices Inc. and Nvidia Corp. have asked the Taiwanese company to make more sophisticated chips at the Arizona plant, according to people familiar with the discussions.

AMD CEO Lisa Su and Nvidia boss Jensen Huang are expected to attend the event. Representatives for AMD and Nvidia declined to comment.

TSMC customers have asked the company to deploy its latest technologies simultaneously in the United States and Taiwan, they explained, which would help meet the Biden administration’s goal of having the world’s most advanced chips produced on US soil. But TSMC hasn’t committed to that approach, and Taiwanese and company officials have said they intend to keep the latest technology in-house.

(with data from Bloomberg)

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