TSMC plans to switch to the United States for 3nm, and the semiconductor landscape is changing

Source: Content from Economic Daily ,Thanks.

Recently, due to considerations of environmental impact assessment schedule, electricity and other variables, TSMC, the leading wafer foundry, has officially included the option of setting up a wafer factory in the United States, and its target is directly aimed at the most advanced 3-nanometer process with an investment of up to 500 billion yuan.

Sources revealed that TSMC's policy shift was mainly due to the fact that the environmental impact assessment work for the Luzhu base in the Southern Science Park, Kaohsiung, which the government was willing to help raise, might not be completed in time to meet TSMC's needs. In addition, the poor air quality and subsequent stability of Taiwan's electricity supply were also variables that interfered with the establishment of the factory.

This also indirectly confirms what TSMC Chairman Morris Chang revealed at the first quarter earnings conference this year that "investment in the United States is not ruled out." TSMC Co-CEO Liu Deyin said at his own supply chain management forum a few days ago that the land for factory construction is being carefully evaluated, and after comprehensively considering relevant investment variables, the company will seriously launch an investment plan in the United States for the subsequent 3nm factory location.

Earlier, TSMC has been emphasizing that it has not yet included investment in the United States in its plans, and has also applied to the Ministry of Science and Technology for assistance in acquiring 50 to 80 hectares of land as a production base for the future 3nm process. The focus of investment will still be on Taiwan.

However, TSMC's supply chain revealed that after careful evaluation, TSMC decided that the Ministry of Science and Technology was willing to assist with more than 50 hectares of land in the Southern Science Park in Kaohsiung, hoping to help TSMC's 3nm plan land there. However, TSMC's goal is to officially start mass production in 2022, which is only five years.

However, if TSMC's 3nm investment is selected at the Luzhu base in the Southern Science Park Kaohsiung, it will take more than five years from the time the investment proposal is submitted to the time the environmental impact assessment is passed.

In addition, the air quality at the Luzhu base in Kaohsiung and Taiwan's repeated calls for a nuclear-free homeland may lead to unstable power supply in the future, which is also a major interference for the 3nm process, which requires extremely stringent production conditions.

TSMC's factory management department confirmed that environmental impact assessment, air pollution and power supply are very important factors in TSMC's current evaluation of factory construction.

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The departure of 3 nanometers will shake up the semiconductor industry

TSMC's 3nm investment is the most critical investment for it to become the world's semiconductor leader. If the government does not help resolve related environmental impact assessments and other variables, TSMC's supply chain is worried that once the United States is selected for this investment, TSMC's subsequent investment will move to the mainland, which will also shake Taiwan's hard-earned semiconductor industry chain, causing significant impact.

TSMC said earlier that it would consider investing in the United States only if it encountered difficulties in land, talent, water and electricity. Earlier, the company's chairman Morris Chang also said that he would carefully analyze the pros and cons of TSMC's investment in Taiwan and the United States. He emphasized that TSMC's manufacturing focus is concentrated in Taiwan, not considering labor costs. The labor costs of TSMC in Taiwan are not lower than those in the United States, but Taiwan has a good industrial cluster.

Morris Chang said that TSMC's factories are located in Taichung, Hsinchu, and Tainan, and can efficiently and flexibly dispatch more than 300 engineers in a day, and also have a complete supply chain and infrastructure and other production advantages. Whether TSMC will invest in the United States must be measured by whether customers have incentives to manufacture in the United States.

Now TSMC has included investment in the United States as an option, and it is directly the most advanced 3-nanometer process, which affects the landscape of Taiwan's semiconductor industry. Once TSMC sets up a 3-nanometer process base in the United States, it also means that TSMC's investment in Taiwan will encounter major resistance. According to the current N-1 regulations for investment in mainland China, subsequent expansion will inevitably move to mainland China, and it is expected that the relevant supply chain will also move westward at the same time, which is worthy of the government's deep consideration.

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