Major Taiwanese Chip Maker to Set Up $3 Billion China Plant

Shuang Shan

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest chip maker by revenue, announced Monday its plans to invest $3 billion in a 12-inch wafer production facility and design service center in Nanjing, China. The facility, wholly-owned by TSMC, will have the capacity to produce 20,000 12-inch wafers per month. Production is expected start in the second half of 2018. The Taiwan Ministry of Economic Affairs, is expected to finish reviewing the application in two months.

TSMC, which has 8-inch wafer manufacturing facility near Shanghai, China, produces Apple Inc’s A8 and A9 processors for an average $23.25 billion per year. The 12-inch wafer, the largest that TSMC produces, requires more advanced technology than the 8-inch wafer.

TSMC’s plan follows a September regulation that allows Taiwanese companies to create up to three wholly-owned 12-inch wafer factories in China, easing a pervious rule that limited facilities in China to joint ventures and less-advanced technologies. Faced with competition from a growing Chinese chip industry and foreign competitors, the new facility will help TSMC expand while protecting its technical expertise.

(Photo by Tony Tseng via Flickr)