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Tuesday, 22 November 2022 09:04

TSMC founder Chang announces new 3nm chip factory for Arizona Featured

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Semiconductors being made in a TSMC fab. Semiconductors being made in a TSMC fab. Courtesy TSMC

Taiwan Semiconductor Manufacturing Company founder Morris Chang appears to have had a complete change of mind about setting up new chip units in the US, announcing on Monday that the company would manufacture 3nm semiconductors at a new factory in Arizona.

Reuters reported Chang, now in his 90s, made the announcement in Taipei after he returned from attending the APEC summit in Thailand, adding that plans were not yet completely finalised.

The 3nm plant would be located at the same site in Arizona as a 5nm plant announced in May 2020, according to Chang.

On two occasions in the past, Chang has expressed serious doubts about the chances of success were TSMC to set up another chip plant in the US.

In April 2021, he told a seminar it would be impossible to replicate in other parts of the world what had been achieved in Taiwan. TSMC is the world's biggest fab.

In particular, Chang said, there were challenges to setting up a plant in Arizona, a US$12 billion (A$18.1 billion) plan pledged during the days of the Trump administration as the US sought to sideline China in its pursuit of chip sources.

And in April this year, Chang warned that it may not be possible to reproduce the success enjoyed by his company in any other country, pointing to the fact that costs are 50% higher in Oregon — where TSMC has had a factory since 1997 — than in Taiwan.

He made these comments during a podcast titled "Can semiconductor manufacturing return to the US?" organised by the Brookings Institution and the Centre for Strategic and International Studies.

Chang said despite the efforts made during the 25-year existence of the TSMC plant in Oregon, "the cost difference between Taiwan manufacturing and Oregon manufacturing has remained about the same".

"The same product, the Oregon cost, is about 50% more than the Taiwan cost. Well, of course for us, the Oregon product is still profitable, although not nearly as profitable as the Taiwan product," he noted.

"So still we have maintained it. We started it in 1997. Initially it was chaos, it was just a series of ugly surprises because when we first went in, we really expected the costs to be comparable to Taiwan. And that was extremely naive.

"But after a few years of trying to make it work, we had to settle down, we had to accept it. And since it was still profitable, of course, we still accepted it, but we didn’t expand it. That was Oregon. We still have about a thousand workers in that factory, and that factory, they cost us about 50 percent more than Taiwan costs."

On Monday, Chang made no reference to his earlier comments and was not asked about them either, going by the Reuters report.

The US is attempting to prevent China from gaining access to advanced semiconductors and in October issued a new set of rules which prevent companies which do business in the US from selling the latest chips to China.

There are also curbs on American citizens or green-card holders from working for Chinese semiconductor factories.

In its bid to attract manufacturing back to the US, Washington outlined a strategy in September, offering up to US$50 billion to companies which were willing to produce chips within the country.

There are three different initiatives: large-scale investments in leading edge manufacturing, new manufacturing capacity for mature and current-generation chips and strengthening American leadership in research and development.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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