TSMC starts mass production of advanced chips in Taiwan

Bloomberg

Taiwan Semiconductor Manufacturing Co (TSMC) kicked off mass production of next-generation chips on Thursday, ensuring the island remains the linchpin of a critical technology fought over by governments from Washington to Beijing.
The primary chipmaker for Apple Inc began bulk production of advanced 3-nanometer chips at its Tainan campus in southern Taiwan. In doing so, TSMC follows Samsung Electronics Co in gearing up on production of a technology that’s expected to control the next lineup of cutting-edge devices from iPhones to internet servers to supercomputers.
TSMC is moving ahead on the next generation of chipmaking as companies with less clout smart from cratering demand amid fears of recession and uncertainty over the impact of US sanctions on China’s economy. TSMC this year reduced its capital spending plans by at least 10% to $36 billion, and some analysts warn it may further delay expenditure on expansion in 2023.
TSMC Chairman Mark Liu expressed confidence in the longer-term outlook for chip demand and promised to build future generations of 2nm chips in the Taiwanese cities of Hsinchu and Taichung.
“The semiconductor industry will grow rapidly over the next decade, and Taiwan will surely play an even more critical role in the global economy,” Liu said. Demand for the 3nm chips is “very strong.”
Taiwan is home to more than 90% of the manufacturing capacity for the world’s leading-edge chips. Global policy makers and customers are increasingly leery of their technological reliance on an island Beijing has threatened to invade and have pushed TSMC to shift some production abroad.
The rollout of the high-performance chips follows the TSMC’s announcement that it will offer 4nm chips at a new Arizona plant from 2024 and 3nm chips at a second US plant in 2026. The company is also ramping up capacity in Japan and exploring sites in countries such as Germany.
TSMC’s recent move to diversify production overseas has raised alarms in Taiwan that this would undermine the island’s strategic importance over the long term. Taiwanese President Tsai Ing-wen said earlier this week that moves by TSMC to build factories overseas is a sign of Taiwan’s power abroad, rather than a threat to local industry. TSMC’s plan to domestically produce 2nm chips is a nod to calls that the island’s firms continue to keep the most advanced chipmaking technology at home.