UPDATE: TSMC plans Arizona chip plant with U.S. officials pushing the move

Taiwan-based TSMC has begun building a 3nm fabrication facility for chips that likely will run in future iPhones.
Taiwan-based TSMC plans to build a 5nm chip plant in Arizona, as U.S. officials push for more domestic chip production. (TSMC)

TSMC, based in Taiwan, plans to build a 5nm chip factory in Arizona, the company said Friday, amid concerns that the U.S. relies too heavily on Taiwan, China and South Korea for chips.

.U.S. State and Commerce departments are involved with the plans.  The Trump administration has recently talked with TSMC, Intel and Samsung about building new foundries or expanding operations in the U.S., the Wall Street Journal has reported.

President Trump on Fox Business on Thursday said, “We shouldn’t have supply chains. We should have them all in the U.S.”

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The cost of the plant will be $12 billion, TSMC said.  It isn’t clear whether there will be government incentives for the plant, which would begin producing chips in 2024 and employ 1,600 people. It isn't known where in Arizona the plant will be built.

TSMC is one of the strongest chipmakers globally and is considered the largest contract semiconductor foundry. It has about 49,000 employees in plants throughout Asia.  It reported $10.3 billion in revenue in the first quarter, a 45% increase over the same quarter in 2019, although it expects second quarter revenues to be flat.  The company received 56% of its first quarter revenues from customers in North America, including Apple.

The TSMC news helped drive up semiconductor stocks late Thursday. The Philadelphia Semiconductor Index, composed of 30 semi makers, rose 2.8 % while TSMC’s stock rose 2.3%.

RELATED: TSMC foundry sees 45% hike in 1Q revenue, reaching $10.3B

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