TSMC suppliers set to follow chipmaker to U.S.

Focus Taiwan

November 20, 2020

Several Taiwan Semiconductor Manufacturing Co. (TSMC) suppliers have voiced their intention to follow TSMC to the United States after the world’s largest contract chipmaker finalized its plan to build an advanced 5 nanometer wafer plant in Arizona.

Clean equipment maker United Integrated Services Co. (UIS), which was named by TSMC as one of its good suppliers last year, said it is planning to set up a U.S. subsidiary and expects the subsidiary to be profitable in its first year of operations.

Marketech International Corp., a facility monitor control system provider, said it already has a team in the U.S. and is planning to expand its presence there because of TSMC’s project in Arizona.

Marketech said its existing operations in the U.S. market should give it the upper hand in winning contracts from TSMC.

On Nov. 10, TSMC’s board of directors approved a plan to invest US$3.5 billion in a wholly owned foundry in Arizona, a move the market saw as cementing the plan first announced in May.

TSMC announced then that it would spend a total of US$12 billion from 2021 to 2029 to build a 12-inch wafer plant to produce chips using the advanced 5nm process.

On Wednesday, officials in Phoenix authorized the city to enter into a development agreement with TSMC. Reuters reported the accord is expected to be inked by the end of the year.

A report after a formal city council meeting released by Phoenix authorities showed the city will spend up to US$205 million on infrastructure projects such as roads, water and sewer improvements to support TSMC’s planned investment in the state.

Among other suppliers and downstream users of TSMC’s chips who could expand to the United States are automated equipment supplier Mirle Automation Corp. and ASE Technology Holding Co., the world’s largest integrated circuit packaging and testing services provider.

Mirle said it wanted to stay geographically close to TSMC to be able to provide it timely services, while ASE said it was studying the possibility of investing in the U.S. as it adjusts its global expansion plan.

In June, TSMC invited a supplier of chemical materials for semiconductors, Taiwan Speciality Chemicals Corp. (TSCC), to invest in the United States to support TSMC’s manufacturing operations.

Under the plan, work on the Arizona facility is scheduled to start in 2021 and production is set to begin in 2024, with a monthly capacity of 20,000 chips.

The new factory is expected to create 1,900 new full-time jobs, to be phased in over a five-year period, according to TSMC’s agreement with Phoenix authorities.