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Triple the investment, 3-nm production by 2026

Taiwan Semiconductor Manufacturing Co. (TSMC) held the first tool-in ceremony at its chip plant in Phoenix, Arizona on December 6th, local time. U.S. President Joe Biden made a personal appearance at the ceremony, alongside Apple CEO Tim Cook and Nvidia CEO Jensen Huang.

Before Biden’s arrival, the White House and TSMC announced in a joint statement that TSMC plans to start construction on a second semiconductor factory in Arizona beginning next year. It is also upping its investment there from US$12 billion to US$40 billion, making this one of the largest foreign investments in U.S. history. The second fab is scheduled to begin production of the most advanced 3nm process technology in 2026.

(Source: Elaine Huang)

TSMC customers like Apple, Amazon, Qualcomm, Nvidia, and AMD have never publicly given voice to their concern about the semiconductor industry’s overreliance on Taiwan. But judging from the who’s-who of the high-tech sector that showed up at the ceremony, it is safe to say they are strongly in favor of manufacturing key components as close to home as possible.

Apple, Nvidia, and AMD have all expressed their interest in purchasing chips from the two new fabs in Arizona. 

Cook says, “Apple is working with TSMC to produce chips that will be used in Apple products around the world. As TSMC plants a new seed at its American site, we look forward to further cooperation between our two companies.” 

AMD CEO Lisa Su says, “AMD looks forward to becoming a major customer of these two fabs. We promise to work closely with TSMC and the entire semiconductor ecosystem.”

(Source: Elaine Huang)

Planting the seed of a new home in Phoenix

On the eve of the big event, CommonWealth sent our correspondent to northern Phoenix, where TSMC’s Fab 21 is located. 

We arrive at a hotel in Happy Valley on the I-17, about 15 minutes’ drive south of Fab 21. The lobby is abuzz with Taiwanese voices. Families are starting their day, as well as a few young engineers from TSMC. 

One senior engineer sits by the door as he waits for his wife and children. He arrived on the first charter flight booked by TSMC on November 1st.

He points at his hotel and another hotel next door. “TSMC engineers have occupied both of these buildings.” He glances at the time. “We need to go to work at noon to accommodate office hours in Taiwan.”

His workplace is another 15 minutes’ drive south of the hotel. It is TSMC’s temporary office.

Back at the end of 2020, when TSMC made their move to Arizona, they rented two floors of the Canyon Corporate Plaza business building in northern Phoenix. 

The hotels around Happy Valley have become the home away from home for the employees of TSMC and its partners. (Source: Elaine Huang) 

TSMC helps drive up real estate prices in the desert

Woodspring Suites is another hotel that opened just last year.

“These are all for the benefit of the workers who are building residences and factories,” says Ken. For the last six months, he’s picked up many passengers headed from Deer Valley to Fab 21 in the north. Factories as well as residences are springing up all around Fab 21.

Michelle Chang (張聖儀) is President of the Taiwanese Chambers of Commerce of North America (TCCNA). She’s lived in Phoenix for over 25 years and rents out apartments for a living. She observes that, ever since TSMC announced its intention to buy 1,200 acres of land around northern Phoenix for its factories in 2020, property prices in a ten-mile radius have gone through the roof. 

To use residential housing as an example, rent for a small family home with two bedrooms and two bathrooms used to be around US$1,800. It has now risen to US$2,600.

Chang estimates there are seven or eight communities in a three-mile radius around Happy Valley and Deer Valley. After TSMC and its partners moved in, around two or three hundred new homes have been rented out.

The business district is also seeing rapid development. A TSMC partner that provides equipment for building the new fabs rented a large warehouse in northern Phoenix in 2021. “It’s all to stick as close to Fab 21 as possible.”

Former empty lots in northern Phoenix are now rows and rows of warehouses. Rent is exponentially more than what it was a couple of years ago.

(Source: Elaine Huang)

Like the Tainan Science Park in southern Taiwan that transformed fields of sugar cane into massive chip plants and a high-tech cluster centered around TSMC, Fab 21 is turning the desert in northern Phoenix into an oasis. 

Even though it’s still up in the air whether Fab 21, which will have high operating costs, will be able to meet expectations, TSMC has already announced that it is building a second fab nearby, pumping more money into advanced semiconductor process technology.

This is not only a new era for TSMC, which is lauded in Taiwan as the “magic mountain that guards the nation”; for TSMC’s enormous team of engineers, it is the beginning of a new adventure in a brave new world. 

Even after office hours, the lights are still on at TSMC’s temporary office, which was set up in 2021. (Source: Elaine Huang)

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Have you read?

• Taiwan’s chip future hanging on TSMC’s 2nd US go-round 
• TSMC alone cannot rebuild the US semiconductor supply chain - Taiwanese Hidden Champions need to follow 

Translated by Jack Chou
Edited by TC Lin
Uploaded by Ian Huang