TSMC's overseas expansion will only contribute 10% of the foundry's production capacity: Report

TSMC is making significant strides in Phoenix, Arizona, where it is about to start mass production of chips on its 4nm and 5nm-class process technologies at its Fab 21 phase 1 and is set to build to more phases by the end of the decade, which will significantly increase its production capacity and global footprint. However, TSMC's building of fabs in the U.S. , Japan , and Germany has raised domestic concerns about industrial relocation from Taiwan, reports Taiwan TV News (TTV).

Following the success of TSMC's expansions overseas, in China, Germany, Japan, and the U.S., there are concerns in Taiwan about the potential impact on domestic industries, as the company is one of Taiwan's flagship manufacturers. However, experts like Bonnie Glaser from the German Marshall Fund have pointed out that even with full production, TSMC's overseas plants will contribute less than 10% of the company's global output, according to TTV. Unfortunately, TTV did not share any actual numbers.

Taiwan's technology sector in general is very resilient. On the one hand, it is developing domestically, and recent reports about TSMC's plans for new fabs on the island just highlight this fact. On the other hand, Taiwanese companies strive for global expansion. TSMC's endeavors in Arizona emphasize its commitment to maintaining a strong global presence while continuing to drive technological advancements from its base in Taiwan.

In Arizona, TSMC is investing over $65 billion to build three phases of its Fab 21. The U.S. government has pledged $11.6 billion in financial aid to TSMC , including $6.6 billion in grants and up to $5 billion in loans, under the CHIPS and Science Act.

The construction site in Phoenix is a hive of activity, with around 8,000 workers on site daily, occasionally peaking at 12,000. The workforce is notably diverse, drawing talent from various ethnic backgrounds, which necessitates a strong emphasis on collaboration and cultural respect within the team, according to TTV.

As TSMC employees settle in Phoenix , they are forming new community clusters, which has created business opportunities for local entrepreneurs, leading to the establishment of Chinese supermarkets and Taiwanese restaurants in the area. The local economy is benefiting from the influx of TSMC employees and their families, reports TTV.