As escalating US-China tensions and COVID-19-related production disruptions force US technology supply chains to transform, Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) US$12 billion chip fabrication plant in Arizona would be key to spurring greater US production of core semiconductor components, Fitch Ratings said.
“We view the US-TSMC alliance as a first step in building a more autonomous US technology supply chain, given high barriers to entry, specifically related to the significant capital and design capability required for leading-edge semiconductor manufacturing,” Fitch said in a statement on Tuesday.
“By working with TSMC, US chipmakers will not face the financial burden of incremental investment that could negatively affect credit profiles. Moreover, producing more upstream components will provide the US greater influence over the semiconductor supply when there are national security concerns,” it said.
TSMC on May 15 announced that it intends to build and operate a 5-nanometer semiconductor fab in the US following media reports that US President Donald Trump’s administration was collaborating with technology companies, including Intel Corp and TSMC, to increase domestic production of semiconductors.
Fitch said that increased production of upstream components in North America could lead to more downstream hardware assembly on the continent, which would enhance US control over the entire tech supply chain.
Increased domestic manufacturing of more advanced components could act as a hedge against geopolitical risks, it added.
Regarding next-generation chips in the global foundry industry, Fitch said that TSMC is technologically ahead of Intel, Samsung Electronics Co and GlobalFoundries Inc.
Meanwhile, Phoenix, Arizona, already has a semiconductor ecosystem — including chip packaging and testing — that helps move US-manufactured products to market, it said.
TSMC already operates a fab in Washington state, as well as design centers in Austin, Texas, and San Jose, California.
The new facility in Arizona, which is expected to start mass production in 2024, would further strengthen its relationship with the US, Fitch said.
The US could offer the company support in the form of tax incentives given its strategic importance to the Trump administration, it added.
Despite COVID-19, the foundry industry remains in good shape, as chip size continues to increase to accommodate more functionality and that has positively impacted foundry demand.
On Thursday, Samsung announced that it would build a new fab in Pyeongtaek, 70km south of Seoul, as the company aims to respond to the demand for extreme ultraviolet lithography process chips.
The Chinese government also recently invested US$2.25 billion in Semiconductor Manufacturing International Corp (SMIC, 中芯國際), hoping to raise its technological competitiveness, while coping with US regulations that restrict chip supplies to Chinese telecom equipment maker Huawei Technologies Co (華為).
However, SMIC lacks the technical prowess and capability to advance Huawei’s growth strategy, Fitch said.
Shiina Ito has had fewer Chinese customers at her Tokyo jewelry shop since Beijing issued a travel warning in the wake of a diplomatic spat, but she said she was not concerned. A souring of Tokyo-Beijing relations this month, following remarks by Japanese Prime Minister Sanae Takaichi about Taiwan, has fueled concerns about the impact on the ritzy boutiques, noodle joints and hotels where holidaymakers spend their cash. However, businesses in Tokyo largely shrugged off any anxiety. “Since there are fewer Chinese customers, it’s become a bit easier for Japanese shoppers to visit, so our sales haven’t really dropped,” Ito
The number of Taiwanese working in the US rose to a record high of 137,000 last year, driven largely by Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) rapid overseas expansion, according to government data released yesterday. A total of 666,000 Taiwanese nationals were employed abroad last year, an increase of 45,000 from 2023 and the highest level since the COVID-19 pandemic, data from the Directorate-General of Budget, Accounting and Statistics (DGBAS) showed. Overseas employment had steadily increased between 2009 and 2019, peaking at 739,000, before plunging to 319,000 in 2021 amid US-China trade tensions, global supply chain shifts, reshoring by Taiwanese companies and
Taiwan Semiconductor Manufacturing Co (TSMC) Chairman C.C. Wei (魏哲家) and the company’s former chairman, Mark Liu (劉德音), both received the Robert N. Noyce Award -- the semiconductor industry’s highest honor -- in San Jose, California, on Thursday (local time). Speaking at the award event, Liu, who retired last year, expressed gratitude to his wife, his dissertation advisor at the University of California, Berkeley, his supervisors at AT&T Bell Laboratories -- where he worked on optical fiber communication systems before joining TSMC, TSMC partners, and industry colleagues. Liu said that working alongside TSMC
TECHNOLOGY DAY: The Taiwanese firm is also setting up a joint venture with Alphabet Inc on robots and plans to establish a firm in Japan to produce Model A EVs Manufacturing giant Hon Hai Precision Industry Co (鴻海精密) yesterday announced a collaboration with ChatGPT developer OpenAI to build next-generation artificial intelligence (AI) infrastructure and strengthen its local supply chain in the US to accelerate the deployment of advanced AI systems. Building such an infrastructure in the US is crucial for strengthening local supply chains and supporting the US in maintaining its leading position in the AI domain, Hon Hai said in a statement. Through the collaboration, OpenAI would share its insights into emerging hardware needs in the AI industry with Hon Hai to support the company’s design and development work, as well
RSS