Arizona is an electoral battleground and the Taiwanese company’s decision to build there could give President Donald Trump an economic win to tout to voters. PHOENIX — Governor Doug Ducey today announced that following a national search, Taiwan Semiconductor Manufacturing Company (TSMC) has selected Arizona for its new U.S. advanced semiconductor factory. TSMC deployed 272 distinct process technologies and manufactured 10,761 products for 499 customers in 2019 by providing broadest range of advanced, specialty and advanced packaging technology services. TSMC is the first foundry to provide 5-nanometer production capabilities, the most advanced semiconductor process technology available in the world. Morris Chang, who was at ITRI at the time presented a plan to the Taiwan government to build the first pure-play foundry. All rights reserved (About Us). It will take time and money to develop the capabilities domestically. TSMC is the world’s largest contract integrated circuit (IC) manufacturer, and it is far and away the technology leader, offering the most advanced manufacturing processes on the planet. When I visited the factory a few years ago, I was told that if you used those mirrors to project a spot on the surface of the moon, it would be a pretty small spot. TSMC said it plans to start construction in Arizona next year and begin making chips in 2024, with expansion continuing until 2029. Depending on the size of the chip, a wafer might hold around very 500 large chips like datacenter microprocessors, to many thousands of smaller chips like those found in a cell phone. The announcement by Taiwan Semiconductor Manufacturing Company (TSMC) of the intention to build a “fab” in Arizona is big news, although it is really just a toe in the water. As the industry moved towards 3D packaging, it will be a critical technology. The state’s skilled workforce, strong supply chain, strategic geographic location, commitment to pro-innovation policies and unmatched quality of life have continued to drive rapid industry growth and economic momentum. I am a professor at Harvard Business School. who never planned to have any manufacturing of their own. Subscribe to OregonLive. The Taiwan government initially owned 49%, Philips 27%, and local private investors 24%. Subscribe to Oregonian/OregonLive newsletters and podcasts for the latest news and top stories. The project will create over 1,600 new high-tech jobs and generate thousands of additional jobs in the state for suppliers and other companies within the semiconductor industry. I’d like to thank TSMC Chairman Dr. Mark Liu for his commitment to Arizona. The Arizona Commerce Authority will continue working with TSMC, the U.S. administration, the City of Phoenix and the Greater Phoenix Economic Council to finalize all aspects of the project. ITRI’s Electronics Research and Service Organization (ERSO) eventually licensed RCA’s CMOS semiconductor process, and sent a team of 35 engineers from Taiwan and five overseas Chinese living in the U.S. to New Jersey in 1976 to learn the technology and transfer it back to Taiwan, where a demonstration production facility was setup. The Company is headquartered in Hsinchu, Taiwan. Taiwan Semiconductor Manufacturing Co., or TSMC, announced on Friday that it plans to build a $12 billion semiconductor factory in Arizona, with construction to start next year. About TSMCTSMC pioneered the pure-play foundry business model when it was founded in 1987 and has been the world’s largest dedicated semiconductor foundry ever since. , AMD, and even Intel It operates primarily in Taiwan but has run the WaferTech factory in Camas since 1998. The state’s skilled workforce, strong supply chain, strategic geographic location, commitment to pro-innovation policies and unmatched quality of life have continued to drive rapid industry growth and economic momentum. AAPL Morris Chang, founding CEO of TSMC AFP PHOTO / Mandy CHENG (Photo credit should read ... [+] Mandy Cheng/AFP/Getty Images). “We have never closed down a single fab in our history, as we are able to convert mature technology production lines to specialty technology such as sensors or power management semiconductors.”. Later that year, in partnership with Philips of the Netherlands, TSMC was launched with Chang as the founding CEO. The Chinese clearly feels the sector is strategically important, as reflected by Jiangsu Changjiang Electronics Technology’s 2015 purchase of STATS ChipPac, one of the leading providers at the time. It’s new Fab 18 which is just ramping up production will produce over one million wafers per year. I’d also like to thank Secretary Ross, his team at the U.S. Department of Commerce including SelectUSA, and the Trump administration for their partnership.”. The key tool in the process comes from ASML in the Netherlands, and that tool weighs 180 tons and costs $120 million each. UMC TSMC declined to comment on whether it considered expanding in Camas instead of building in Arizona. . The production process takes 40 or more days, as wafers have to go through 300+ process steps (and considerably more for some of the most advance processes). Several sites in the City of Phoenix are still being evaluated for the location of the factory. Washington is reliably Democratic, offering little electoral opportunity to the president. It will be interesting to watch how this plays out. The U.S. Defense Advanced Research Projects Agency (DARPA) initiated projects to develop electronic design tools that enabled the separation of the design process from the manufacturing. This new U.S. facility will enable TSMC to provide enhanced service to customers and partners and increase its ability to attract global talent. Several sites around the City of Phoenix are being looked at for the exact location of the factory. I co-authored (with Gary Pisano) the book, “Producing Prosperity: Why America Needs a Manufacturing Renaissance,” and have. The Arizona facility will be the company’s second manufacturing operation in the United States.Several sites in the City of Phoenix are still being evaluated for the location of the factory. The optical engine inside the tool is produced by Zeiss in Germany. © 2020 Forbes Media LLC. With global operations spanning Asia, Europe, and North America, TSMC serves as a committed corporate citizen around the world. Opinions expressed by Forbes Contributors are their own. TSMC said Thursday it will build its Arizona factory with unspecified support from the state and federal governments. The Trump administration has courted TSMC and Intel, Oregon’s largest corporate employer, seeking to bolster domestic chip production and blunt China’s aggressive expansion into the semiconductor industry. This was the birth of the concept of having a separate “foundry” that would contract manufacture chips for multiple customers. The 260-acre Camas site was designed to accommodate several chip factories, but after a series of logistical problems TSMC abandoned plans for a large U.S. campus there. TSMC deployed 272 distinct process technologies and manufactured 10,761 products for 499 customers in 2019 by providing broadest range of advanced, specialty and advanced packaging technology services. ’s System/360, and Kenneth G. Mackay, executive vice president of Bell Labs and a pioneer in communications engineering. An expansive swath of desert in north Phoenix is likely the landing spot for Taiwan Semiconductor Manufacturing Co. Ltd.’s $12 billion plant, multiple sources with … As a result, the Arizona fab represents a significant shift for TSMC; it’s not the first US fab for the company, but it’s the first time TSMC has built such an advanced fab in another nation. By 1986, ITRI had completed building a VLSI model factory. The project will create over 1,600 new high-tech jobs and generate thousands of additional jobs in the state for suppliers and other companies within the semiconductor industry. TSMC is the first foundry to provide 5-nanometer production capabilities, the most advanced semiconductor process technology available in the world. The state’s Department of Commerce confirmed Friday that it had sought TSMC’s new plant. Registration on or use of this site constitutes acceptance of our User Agreement, Privacy Policy and Cookie Statement, and Your California Privacy Rights (each updated 1/1/20). However, our flexibility in assurance of supply for diverse customer needs, best-in-class cycle time, agility in meeting customers' capacity needs, ability to scale and maintain high yield, and accurate delivery make semiconductor manufacturing excellence a core strength. We are honored to be selected for this project and look forward to building a collaborative long-term relationship with TSMC. © 2020 Advance Local Media LLC. Fabs make ICs on silicon wafers, typically 300 mm (12 inches) in diameter, so that means 240,000 wafers per year. , Qualcomm Note to readers: if you purchase something through one of our affiliate links we may earn a commission. The $12 billion cost estimate for the Arizona fab should take the breath away of most CFOs. Armies of workers looking through microscopes wire bonded leads to the ICs and placed the chips in packages. 20,000 wafer starts a month is around the minimum efficient scale for a fab. The Arizona facility will be the company’s second manufacturing operation in the United States. $12 Billion is a staggering level of investment, and most of that money will be going into specialized production tools that can make the extremely fine circuit patterns on these chips. The STAG played a key role in pushing Taiwan’s Industrial Technology Research Institute (ITRI) to investigate semiconductors. -- Mike Rogoway | mrogoway@oregonian.com | twitter: @rogoway | 503-294-7699. I co-authored (with Gary Pisano) the book, “Producing Prosperity: Why America Needs a Manufacturing Renaissance,” and have written numerous articles on manufacturing and supply chains in the Harvard Business Review, MIT Sloan Management Review, and elsewhere. While other companies, notably LSI Logic and IBM in the U.S., Toshiba in Japan, and Samsung in Korea offered foundry services, they produced their own chips as well. Governor Doug Ducey today announced that following a national search, Taiwan Semiconductor Manufacturing Company (TSMC) has selected Arizona for its new U.S. advanced semiconductor factory. PHOENIX — Governor Doug Ducey today announced that following a national search, Taiwan Semiconductor Manufacturing Company (TSMC) has selected Arizona for its new U.S. advanced semiconductor factory. TSMC is a contract manufacturer making chips for other Apple and many other electronics companies. As I wrote earlier this week, Intel might still enter the foundry business, and that would provide some healthy competition. TSMC’s three “Gigafabs” in Taiwan, Fabs 12, 14, and 15 handle around 150,000 per month each (based on the last time they would let me inside for a visit), and the company’s overall capacity is around 2.5 million per month. We will also rely on Asia for slicing those wafers up into individual chips and putting them into packages. But the company said it doesn’t intend to walk away from the WaferTech factory, known in the chip industry as a fab. TSMC's WaferTech factory in Camas, in 2004.TSMC photo. The mirrors in that engine are polished to a surface roughness that is roughly the size of one atom. TSMC pioneered the pure-play foundry business model when it was founded in 1987 and has been the world’s largest dedicated semiconductor foundry ever since. All Rights Reserved, This is a BETA experience. AVGO I teach at Harvard Business School, and I write about manufacturing, EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, complexity of very-large-scale integration. We are honored to be selected for this project and look forward to building a collaborative long-term relationship with TSMC. As such, it is a critical supplier for companies like Apple ... [+] Photographer: Jasper Juinen/Bloomberg. Community Rules apply to all content you upload or otherwise submit to this site. Decades ago when the IC industry was just getting started, wafers containing chips were sent to Asia for the labor intensive packaging step.