A Boost for U.S. Semiconductors: TSMC to Produce Chips in the U.S.

Higher Costs and Prices Ahead?

The news of Taiwan Semiconductor Manufacturing Company (TSMC) building production facilities and manufacturing chips in the United States is a significant step forward for the U.S. domestic semiconductor industry. However, there’s a potential drawback – higher production costs, which could translate to higher prices for TSMC’s American clients. To be exact, the 30% higher costs in the U.S. are due to the lack of well-established semiconductor supply chains in the country.

Initial Plans and Future Ambitions

Under Phase 1, TSMC is expected to produce 20,000 wafer units per month. Apple, Nvidia, AMD, and Qualcomm are among the customers set to benefit from this production. Phase 2, meanwhile, is even more ambitious, with plans to manufacture 2nm chips by 2028.

More U.S. Facilities on the Horizon

In the Phoenix area, two more fab facilities are under construction, with the second one poised to start producing 2nm chips by 2028. While TSMC’s Taiwanese facilities will start mass-producing 2nm chips in the second half of 2023, the company plans to manufacture 1.6nm chips in Taiwan by 2028. The importance of process nodes cannot be overstated – as they shrink, transistor size decreases, allowing for:

• Higher transistor counts and transistor density
• More powerful and/or energy-efficient chips

Typically, higher transistor counts enable chips to process more information quickly and efficiently. This, in turn, enables the development of more advanced technology.