The world’s largest chipmaker is set to more than triple its previously announced $12 billion investment

Back in May 2020, Taiwan Semiconductor Manufacturing (TSMC), by far the world’s largest producer of microchips, announced its intentions to build its newest $12 billion factory in Phoenix, Arizona, having been evaluating US locations since 2019.

Now, TSMC has announced a significant upscaling of these plans, announcing its intention to increase its total investment in the facility to around $40 billion.

According to sources speaking to Japanese news media Nikkei, TSMC was initially planning to use the new fab to produce 20,000 wafers per month but is now planning to double that capacity through the new investment.

The new facility will also create more advanced chips than previously hoped, include 5nm and 4nm chips. A second planned facility, the details of which have yet to be announced, will also create cutting-edge 3nm chips by 2026.

The announcement came in conjunction with the Arizona facility’s official ‘tool-in’ ceremony today, where the first piece of equipment is installed on the shop floor, with US President Joe Biden notably in attendance.

The investment by TSMC represents a major win for President Biden’s semiconductor strategy, which aims to shrink the US’s reliance on China and Taiwan for semiconductor manufacturing.

Earlier this year, the President passed the Chips and Science Act, earmarking $52 billion in subsidies for US-based chipmakers, spurring a flurry of speculation about multi-billion-dollar investments from TSMC, Intel, and others.

President Biden was not the only high-profile guest at the ‘tool-in’ ceremony included TSMC founder Morris Chang and several high-profile customers, including Apple CEO Tim Cook, NVIDIA CEO Jensen Huang, and Micron CEO Sanjay Mehrotra.

“Bringing TSMC’s investment to the United States is a masterstroke and a game-changing development for the industry,” said Huang in a pre-prepared statement.

But despite all this optimism about TSMC increased US capabilities, it is worth noting that the US will be far from weaned off its reliance on Taiwan for semiconductor production. Even if the new fab quickly reaches its full capacity, domestically made chips in the US will still only account for only around 15% of the country’s demand, leaving the US still largely at the mercy of the geopolitical tides lapping the shores of Taiwan.

How will the increase in domestic chip manufacturing capabilities impact the US telecoms industry? Find out from the experts at next year’s Connected America conference live in Dallas, Texas

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