Taiwan Semiconductor Manufacturing Company (TSMC) could be preparing for another multibillion-dollar investment in Arizona soon.
The world's largest contract chipmaker has reportedly been planning on building another $12 billion semiconductor factory in Arizona to produce next-generation 3nm chips, per a Wall Street Journal report.
TSMC is also one of Apple's major chip suppliers, with the two tech giants agreeing to do business with each other despite the former's price increase for its chips.
TSMC Second Chips Factory Investment Details
WSJ sources mentioned that TSMC is planning on building another chip fabrication plant in Arizona to further boost its production capabilities for next-generation chips.
The sources said that the new factory will be located north of Phoenix and is priced at around $12 billion - the same amount the company spent to establish its first plant in the US state, per MacRumors.
Additionally, the company will use this new factory to manufacture next-generation 3nm chips - a chip that Apple could be used in its next original System-On-a-Chip (SOC), the M3, and the A17 chip.
These two chips are expected to be installed on Apple's upcoming Macs and iPhone 15 Pro models, per Bloomberg's Mark Gurman.
TSMC's expansion isn't much of a surprise, considering that the company is said to be planning on building several more chipmaking fabrication plants in Arizona aside from its first, per a previous Reuters report.
The company also discussed that the upcoming factories in the state should be more advanced facilities that can manufacture 3nm chips instead of the slower, less efficient 5nm ones the first factory is producing.
Speaking of the first factory, the company originally planned to have it mass-produce 5nm chips exclusively. However, it is now being refitted to produce the more advanced 4nm chips alongside the factory's 5nm chips.
The mass production of the 4nm chips is expected to begin sometime in 2024.
TSMC has yet to release an official statement regarding its alleged plans for a second fabrication plant, Reuters said.
The Effect Of The CHIPS Act
Semiconductor manufacturers such as TSMC have been capitalizing on the enactment of the CHIPS Act, formally known as the Creating Helpful Incentives to Produce Semiconductors for America Act, to bring their manufacturing expertise to the country.
The Act, created to fill the gaps and vulnerabilities in America's electronics supply chain brought on by the semiconductor shortage, gives Semiconductor manufacturers a $52 billion subsidy as an incentive to promote semiconductor manufacturing and increase investments in semiconductor research in the US.
It also comes with an income tax credit for semiconductor equipment or manufacturing investment through 2026, per the Act's page on Congress' website.
President Biden also noted in his SOTU address that America needs a level playing field with China and other competing countries "for the jobs of the future."
The Act was put into law in late-July with a vote of 64 to 33, though it couldn't guarantee more jobs or lower prices.
