Silicon chipmaker TSMC eyes $12B US factory

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Taiwan Semiconductor Manufacturing Company (TSMC) has announced plans to build an advanced chip foundry in Arizona, United States. TSMC, considered to be the world’s third largest semiconductor manufacturer after Samsung and Intel, says the new factory will start producing chips by 2023.

TSMC is one of the most dominant players in the industry, supplying semiconductors to global giants such as Apple, Nvidia and Huawei. The company, based in Hsinchu in Taiwan, also supplies chips to some of the largest makers of digital currency mining equipment.

The project has been in the pipeline for a while now, with TSMC revealing that it was in talks with the government in 2019. It will spend $12 billion on the foundry, with construction expected to start next year, CNN reports. This will be the second foundry in the U.S., with TSMC already operating a similar one in Washington. It also has design centers in San Jose and Texas.

TSMC supplies semiconductor chips to some of the largest mining equipment manufacturers, key among them Beijing-based Bitmain. The company’s Antminer S19 uses TSMC’s 7-nanometer chips. Yet another major player, Canaan Creative, also uses TSMC’s chips. However, unlike Bitmain, Canaan also buys chips from Samsung.

Late last year, Bitmain and Canaan announced that they would be integrating TSMC’s 5-nanometer chips in their mining equipment. The 5nm chip is the latest in the market, with production starting this year. The chip enhances performance by 15% with the same power consumption. With energy consumption being one of the biggest cost factors for digital currency miners, the news was warmly welcomed.

It’s unlikely that the construction of the Arizona factory will have a huge impact on the digital currency mining equipment industry. This is mainly because most of the manufacturers equipment are based in China. These companies will most likely continue to source their chips from TSMC’s factory in Asia.