TSMC reportedly asked by the U.S. to build a total of six fabs in the states

Last year, in a bid to boost chip production in the U.S., the world's leading contract foundry, TSMC, announced that it was spending $12 billion to build a fabrication facility in Arizona. The fab is expected to start production in 2024 with 5nm chips rolling off of the assembly line. That process node, currently used on 2021's cutting-edge chips like the A14 Bionic and the Snapdragon 888 SoC, will be old news by 2024, replaced by 3nm and possibly 2nm chips.

Still, the idea that the U.S. could eventually become a source of powerful chips has to make the executives of top American tech firms happy and excited. And making them even more excited is a story published today by Reuters that cites three sources who say that TSMC is looking to expand its production facilities in Arizona to as many as five additional fabs for a total of six. The initial facility is being designed to produce 20,000 12-inch wafers each month, each one yielding thousands of chips.

One source said that the U.S. was behind the request to build the additional fabs. He said, "The United States requested it. Internally TSMC is planning to build up to six fabs." TSMC does have an older facility in the state of Washington and another in China that turns out older components as the vast majority of its high-powered chips are produced in Taiwan.

The initial factory is located in Phoenix, Arizona and TSMC is reportedly spending $12 billion to build it and get it running. Last month, TSMC also said that it would spend $100 billion over the next three years to expand its current chip production facilities. Because of the pandemic, there is a shortage of chips worldwide and this is having a negative impact on the automobile and tech industries as Ford is believed to be cutting production by 50% and Apple has warned of shortages for the iPad during the second half of this year.

The Biden administration is willing to spend tens of billions of dollars to expand the domestic chip industry in the U.S. and one of Reuters three sources said that in choosing the location of its first new factory in Arizona, TSMC made sure that there was enough room to build additional fabs. The plan, according to another one of the sources, is to have a total of six production facilities built over the next three years. Last week, TSMC announced that it had hired the first 250 Americans who will work at the initial facility with 100 of them sent to Taiwan for training.

TSMC was asked whether the expansion to as many as six total fabs was due to a request from the U.S. and stated that the decision to build addition fabs will be based on other factors. These factors were discussed by the company's CEO C.C. Wei during a conference call last month following TSMC's latest quarterly earnings report.

During the call, the executive said, "But in fact, we have acquired a large piece of land in Arizona to provide flexibility. So further expansion is possible, but we will ramp up to Phase 1 first, then based on the operation efficiency and cost economics and also the customers' demand, to decide what the next steps we are going to do." When asked whether the planned expansion to as many as six total fabs was due to a request from the United States, TSMC said it was "not sure" what was meant by "requests" coming from the U.S. side.

TSMC says that "Once there is any official decision, we will disclose it accordingly."