TSMC Invests $100B in US Fabs as US Seeks Chip Independence
Taiwanese chipmaker TSMC is expanding its US footprint with a $100 billion investment in three new fabs, as the USA seeks to reduce its reliance on foreign chip production. Meanwhile, negotiations are underway with countries like Canada and Malaysia to secure crucial materials and strengthen supply chains.
TSMC, the global leader in semiconductor fabrication, is set to lose its special export privileges by the end of the year. To mitigate this, the company is investing heavily in the USA, with plans to reach volume production of its N3 technology in 2028 at its Arizona facility, which currently produces N4 technology.
The USA is engaging strategically with countries like Canada, home to the Canadian Lithium Americas Corp., to secure lithium supplies vital for battery production. Additionally, the USA is courting Southeast Asian nations like Malaysia, a key player in semiconductor exports and supply chains. The USA strategy includes investments in and potential strategic stakes in companies like Lithium Americas, along with tariff threats to encourage reshoring of production.
US Secretary of Commerce Howard Lutnick has proposed a 50/50 split in future chip production between the USA and Taiwan. However, Taiwanese politician Cheng Li-chiun has denied any commitment to this arrangement. Taiwanese companies with fabs outside Taiwan must be a node generation behind, according to current rules.
To incentivize domestic chip production, the US government is considering imposing tariffs on US firms that do not source an equal amount of American chips.
TSMC's significant US investment signals a shift in global semiconductor production. The USA, seeking to reduce its dependency on foreign production, particularly China, is engaging with strategic partners and implementing tariff threats to encourage reshoring. Despite USA proposals for a 50/50 production split with Taiwan, Taiwanese officials have not committed to this arrangement.
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