US President Joe Biden walks with CEO of TSMC CC Wei and Chairman of TSMC Mark Liu during a visit to TSMC AZ's first Fab (Semiconductor Fabrication Plant) in P1A (Phase 1A), in Phoenix, Arizona, US December 6, 2022.Photo: Reuters

Staff writer, with CNA

De-Taiwanization” due to Taiwan Semiconductor Manufacturing Co's (TSMC, TSMC) investments in the US would not happen, Minister of Economic Affairs Wang Mei-hua (王美花) said yesterday, adding that TSMC chief executive officer CC Wei (Wei Zhejia) has also emphasized that such a scenario is impossible.

TSMC, the world's largest contract chipmaker, began construction of a US$12-billion plant in Arizona about 18 months ago with the aim of having it begin commercial production in 2024 using the 5nm process.

However, just hours before United States President Joe Biden's visit to "First Tool-In" ceremony at the TSMC facility, TSMC announced that it had started the construction of a second fab in Phoenix, Arizona, that will use more advanced 3nm process technology when production begins in 2026.

It also said it intended to make 4nm chips at the first plant instead of 5nm chips as originally planned.

TSMC investment in Arizona could be “a gamechanger,” Biden said yesterday during his visit to the site of TSMC's first chip plant in the state, hailing it as bolstering manufacturing in the US

“TSMC is investing US$40 billion dollars here in Arizona, the largest foreign investment in the history of this state,” Biden said after making a tour of TSMC's 4-nanometer wafer fab that is still under construction.

In Taipei, some worry that an outflow of talent and technology might lead to the nation's “de-Taiwanization” with TSMC investing heavily in the US.

“TSMC has a research and development center, and a complete supply chain in Taiwan,” Wang told reporters in Taipei. “The chipmaker's 3-nanometer fab in Taiwan has started trial production and it is seeking to appropriate land for a planned 2-nanometer fab in places including Hsinchu County's Baoshan Township (宝山) and Taichung."

“The government is also working on the third expansion phase of the Longtan Science Park (Longtan Science Park) in Taoyuan to prepare for TSMC's 1-nanometer plant,” she said. “With Taiwan's complete supply chain and ecosystem, coupled with government efforts, Taiwan continues to be TSMC's most important production base."

TSMC would also take into account protecting its business secrets, such as technology patents, when investing in the US, she said.

“TSMC is well known globally for its protection of trade secrets,” Wang added.

On Saturday, Wei was asked whether an “outflow of talent” to Arizona might “hollow” Taiwan's semiconductor industry.

It would not happen, he said.

Taiwan's semiconductor industry has worked hard to build a solid production and supply chain over the past 30-plus years, so “it is impossible for it to be knocked down,” Wei said.

TSMC holds a "First Tool-In" ceremony at its facility under construction in Phoenix, Arizona, US, on Dec. 6, 2022. TSMC also announced plans to boost its investment in the state to $40 billion and construct a second production facility, following major customers urging the Taiwanese chipmaker to build more advanced semiconductors in the US. Photo courtesy of National Development Council

Minister of Economic Affairs Wang Mei-hua speaks to reporters at the legislature in Taipei yesterday about Taiwan Semiconductor Manufacturing Co's investment plans in Taiwan and the US.Photo courtesy of Ministry of Economic Affairs