Please ensure Javascript is enabled for purposes of website accessibility

Taiwan Semiconductor To Build a $12 Billion Chip Plant In Arizona

By Anders Bylund - May 15, 2020 at 12:57PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The largest third-party chip foundry in the world is putting a cutting-edge facility on American soil for the first time in two decades.

The world's largest semiconductor manufacturing specialist will spend $12 billion on a next-generation chip factory in Arizona.

Taiwan Semiconductor Manufacturing (TSM 1.50%) committed to this massive project on Friday, as the Trump administration tightened restrictions on semiconductor shipments to and from China.

A $12 billion investment

The new chip-making facility will use Taiwan Semi's advanced 5-nanometer manufacturing process. Construction is scheduled to start in 2021 and the first production runs should take place three years later. When the plant ramps up to full production volumes, TSM expects 1,600 high-tech workers at the facility to churn out 20,000 semiconductor wafers per month.

This will not be Taiwan Semi's largest production facility by a long shot. The company already has three Taiwanese chip factories with monthly capacities of at least 100,000 wafers and an even larger plant should open its doors later this year or in early 2021. All told, Taiwan Semi's production capacity adds up to 2.5 million wafers per month. American semiconductor giant Intel (INTC 1.46%) can create 817,000 wafers per month. Four of Intel's 15 global chip-making facilities can be found in Chandler, Arizona.

Automated tools making microchips out of a silicon wafer.

Image source: Getty Images.

The Arizona location will be Taiwan Semi's second North American facility, following the 1998 opening of a smaller plant in Camas, Washington. The Camas factory runs a variety of older manufacturing processes, ranging from 160 to 350 nanometers. The Arizona project gives the company a modern manufacturing option in close proximity to high-tech design centers of Silicon Valley and the Silicon Prairie.

"This U.S. facility not only enables us to better support our customers and partners, it also gives us more opportunities to attract global talents," Taiwan Semi said in a written statement. "This project is of critical, strategic importance to a vibrant and competitive U.S. semiconductor ecosystem."

Anders Bylund owns shares of Intel. The Motley Fool owns shares of and recommends Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Taiwan Semiconductor Manufacturing Company Limited Stock Quote
Taiwan Semiconductor Manufacturing Company Limited
$90.86 (1.50%) $1.34
Intel Corporation Stock Quote
Intel Corporation
$36.11 (1.46%) $0.52

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.