[News] TSMC’s Global Expansion: Progress in New US, German, and Japanese Fabs

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During the 3Q23 Earning Call on October 19th, TSMC provided updates on its international factory construction. Notably, the new plant in Phoenix, Arizona, USA, is on track to commence production in the first half of 2025. The German facility is scheduled for production in 2027. The Kumamoto plant in Japan is making swift progress, with production expected to start by the end of 2024. TSMC remained silent regarding its plans following the announcement of discontinuing Phase 3 construction at the Longtan Park.

In line with its global expansion strategy, TSMC has established semiconductor fabrication plants in various locations, including Phoenix, USA, Dresden, Germany, and Kumamoto, Japan. In the recent update, TSMC shared details about these overseas projects. In the case of the new US facility, it has already hired nearly 1,100 local employees and aims to employ 4-nanometer (N4) technology by the first half of 2025.

As for the Dresden plant, TSMC announced the construction of a specialized semiconductor fabrication facility primarily catering to the automotive and industrial sectors, utilizing 22/28-nanometer and 12/16-nanometer technologies. Construction is set to begin in the latter half of 2024, with production slated to commence by the end of 2027.

The Kumamoto plant in Japan is making the most rapid progress. TSMC noted that this semiconductor fabrication facility will use 12/16-nanometer and 22/28-nanometer process technologies. Approximately 800 local employees have already been hired, and equipment for this plant began to be relocated this month. Production is expected to commence by the end of 2024.

Regarding the higher initial production costs at overseas plants, TSMC explained that these costs are higher than those at its Taiwanese semiconductor fabrication facilities. This is primarily due to the smaller scale of overseas semiconductor fabrication plants and the higher overall supply chain costs. In comparison to Taiwan’s mature semiconductor ecosystem, overseas semiconductor ecosystems are still in their early stages.

In addition, there has been significant attention on recent developments related to the Longtan Park Phase 3. However, TSMC made no mention of it in the press conference, only stating that they will continue to evaluate suitable construction locations.

Notably, TSMC recently received an extension waiver from the US Department of Commerce’s Bureau of Industry and Security (BIS) to continue operations in Nanjing, China. They are currently in the process of obtaining “Validated End-User (VEU)” authorization, with expectations of securing an indefinite exemption in the near future.