Top chipmaker TSMC says construction of $12B Arizona plant is ‘well underway’

Taiwan Semiconductor Manufacturing Co. said it’s moving forward with plans to build a $12 billion chip plant in Phoenix, a step toward addressing U.S. concerns over reliability and security in the tech supply chain.

Construction is “well under way,” CEO C.C. Wei said during a pre-recorded presentation at the company’s annual technology symposium for North America on Tuesday.

Phoenix city officials approved financial incentives and government support for the project in November. The city agreed to provide about $200 million to develop roads, sewers and other infrastructure, according to a notice from the city council. Wei also reiterated a previously announced plan to mass-produce advanced 5-nanometer chips by 2024 in the state.

As semiconductor shortages have squeezed automakers and other customers this year, governments around the world are looking to build local chip capacity to solidify their supplies. U.S. Commerce Secretary Gina Raimondo said last month that while the Biden administration is working with Taipei and TSMC to address the chip crunch, it’s also looking to reduce U.S. dependence on Taiwan. It has proposed allocating $52 billion to strengthen domestic semiconductor manufacturing.

Raimondo has said the money would help to build another six or seven chip plants, “so we won’t be so vulnerable to relying overly on one company or one country.” TSMC may be the company she’s referring to, but it could also be part of the solution for the U.S.

TSMC is the world’s most advanced manufacturer of chips, with customers such as Apple Inc., Nvidia Corp. and Qualcomm Inc.

American, European, Japanese, and Korean officials have all called on Taiwan to help address their potential economic vulnerabilities, stemming from shortages of chips for automobiles. The auto industry alone is projected to lose $110 billion in sales this year because of the chip crunch.​