TSMC Will Finalize Clean Room, EUV Contracts For U.S. Fab This Month – Report

The Taiwan Semiconductor Manufacturing Company (TSMC) is rumored to be finalizing crucial contracts for its chip manufacturing facility in the United States. TSMC has laid out $12 billion of investment for the plant, and the facility is expected to commence mass-producing the company's 5nm chip process node by 2024. The company is busy soliciting its Taiwanese suppliers to set up base in the U.S. and begin equipping the plant with the equipment necessary for chipmaking. At this front, reports from United Daily News and MINEWS, which sources Electronic Times, suggest that contracts for some services such as cleanroom supplies will be finalized before TSMC's second-quarter earnings conference due later this month.

TSMC's Clean Room Contract Finalization On Track As Suggested By Supplier Earlier This Month

Today's reports follow statements made by TSMC's clean room supplier Jiangxi Hantang System Integration Co. in April, which provided some of the first details about the American chip plant's equipment progress. The plant will be built in the state of Arizona, which already houses the world's largest chipmaker, Intel Corporation, and Hantang's chairman Mr. Chen Chaoshui outlined that contracts for the plant would be finalized by July and equipment installation would start in September of next year.

It also sticks to the timeline highlighted by the executive. It cites market rumors in Taiwan to claim that contracts for services such as clean room equipment are in their final stages and will be finalized before TSMC's upcoming investor conference for its earnings report for the second quarter of this year. This conference will be held on the 15th of this month, according to TSMC's investor relations website.

Hantang specifically will send more than 20 of its top engineers to the U.S., and it will also hire roughly 200 personnel in the country. According to Mr. Chaoshui, plant construction costs are higher in America, and TSMC can build "three or four factories" in Taiwan at the same cost.

TSMC's render of its Arizona fab was shared during its tech symposium last month. Image: Taiwan Semiconductor Manufacturing Company

In addition to Hantang, other TSMC suppliers are also expected to finalize their contracts by the end of this month. Fanxuan System Technology, which is TSMC's module production partner for the Dutch company's ASML's extreme ultraviolet (EUV) lithography machines, will also send engineers to Arizona, and it is expected that the company's revenue stream from the plant will start in the third quarter of next year.

The EUV machines form the backbone of modern chipmaking as they can reduce the wavelength of the light beams used to print billions of tiny circuits on a piece of silicon. According to details TSMC shared during its technology symposium last month, the fab owns half of all these machines globally, and it was responsible for shipping 65% of all EUV-based chips last year. ASML has a monopoly on these machines, and their ownership is a key competitive advantage that fabs fight for.

TSMC is currently mass producing its 5nm chip process node, and it expects to kick off production of the 3nm node next year. Due to the production timeline of the Arizona fab, many believe that by the time it starts shipping wafers, 5nm will be replaced by more advanced chipmaking nodes. At this front, unconfirmed rumors have indicated that the company is considering expanding the facility also to manufacture 3nm processes.

These rumors accompany speculation that TSMC is also interested in expanding its construction plans for the Arizona plant. A report that surfaced in May suggested that the fab was incentivizing its employees to relocate to the U.S. and considering building six factories in the facility with a planned output of 100,000 wafers/month. TSMC's publicly revealed plans for the factory highlight an output of 20,000 wafers/month, and the fab has not confirmed nor denied the rumors.

The post TSMC Will Finalize Clean Room, EUV Contracts For U.S. Fab This Month – Report by Ramish Zafar appeared first on Wccftech.