Market Overview

Taiwanese Apple Supplier TSMC To Build $12B US Chip Factory After Months Of Pressure From Trump Administration

Taiwanese Apple Supplier TSMC To Build $12B US Chip Factory After Months Of Pressure From Trump Administration

Taiwan Semiconductor Manufacturing Ltd. (NYSE: TMC) announced on Friday (Taipei time) that it is building an "advanced" semiconductor manufacturing facility in the United States.

What Happened

The chipmaker said it expects the factory, to be built in Arizona, to cost about $12 billion over the course of nine years between 2021 and 2029. Production could start as soon as 2024, TSMC noted.

According to the Apple Inc. (NASDAQ: AAPL) supplier, the facility is being built with "mutual understanding and commitment to support" from the U.S. federal government and the Arizona state government.

TSMC said the manufacturing facility will utilize its 5-nanometer technology for semiconductor water fabrication and will have the capacity of 20,000 chip wafer per month. The plant will create over 1,600 "high-tech professional jobs directly, and thousands of indirect jobs," it added.

The Taiwanese company currently has one manufacturing plant in Washington and one design center, each in Texas and California.

Why It Matters

The move comes as President Donald Trump's administration has been reportedly pressuring the company to increase its production in the U.S. for months.

The novel coronavirus (COVID-19) pandemic has further threatened a supply-chain disruption to the U.S., as a majority of advanced chipmaking is done in Asia, especially Taiwan and South Korea.
The Wall Street Journal earlier this week reported that the Trump administration has been in talks with TSMC and Intel Corporation (NASDAQ: INTC) to ramp up U.S. production in the wake of the pandemic.

Price Action

TSMC shares closed 2.3% higher at $52.10 in the regular session on Thursday and inched further higher in the after-hours at $52.50.

Image Credit: Wikimedia.


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