TSMC has dropped a bombshell by announcing a plan to build a 5nm fab in the US. While the full impact of the fab project remains to be seen, Digitimes Research believes it could reshape the global chipmaking supply chain. A TSMC wafer fab designed for advanced 5nm process manufacturing in the US could drive changes to many semiconductor players within the supply chain. Another point made in Digitimes reports today speculates that it’s even possible for TSMC and Foxconn to collaborate with their U.S. operations.
TSMC disclosed on May 15 its intention to build and operate a 5nm wafer fab in Arizona with monthly capacity designed for 20,000 wafer starts. Construction is planned to start in 2021 with production targeted to begin in 2024.
The announcement by the world’s top foundry chipmaker could suggest a potential change to the global chipmaking supply chain now located mainly in Asia.
Arizona is where the US has its major electronics industry, aerospace and defense manufacturing operations, as well as an IC industry cluster where Intel, Raytheon, Microchip, ON semiconductor, VLSI, Freescale, NXP, STMicroelectronics, Honeywell, Marvel, Amkor, Philips and Western Digital operate their plants.
With TSMC likely to be involved in the IC industry cluster in Arizona, a bigger and complete local ecosystem could take shape, Digitimes Research believes. For the pure-play foundry itself, ensuring its business model and supply chain ecosystem locally is also a must for its fab project.
Some major Taiwan-based partners of TSMC, such as OSAT providers, may be encouraged to set up production locally in Arizona to support the future needs of TSMC’s 5nm wafer fab.
It remains to be seen whether its 5nm fab investment in the US will affect its ongoing expansion project at its new Fab 18 in the Southern Taiwan Science Park.
Digitimes added in a second report today that “As TSMC plans to build a 5nm wafer fab in the US, how the company will handle backend support for the fab is drawing concerns from Taiwan’s backend supply chain, and a possible solution is for the foundry to migrate its mature CoWos packaging process.”
In a third report, Digitimes noted that “It would not be a surprise if Foxconn Technology Group collaborated with TSMC to jointly develop their operations in the US by 2024, given the firm’s deployments in fan-out panel-level packaging and SiP (system in package) technologies
In a fourth report by Digitimes this morning they note that “TSMC has an over 50% of the global pure-play foundry market, and the establishment of its new US fab could pose a further threat to Samsung’s foundry operations and Globalfoundries.
Both Samsung and Globalfoundries already have manufacturing sites in the US. However, the US market remains TSMC’s largest revenue contributor as the foundry with its advanced fabs mostly in Taiwan has secured crucial orders from major US vendors including AMD, Apple, Broadcom, Nvidia and Qualcomm.
