Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, has been expanding its horizons since last year, with the announcement of its first factory in Japan and possible expansion into the European Union (EU). The semiconductor powerhouse is reportedly considering constructing a "multi-billion dollar" facility in Singapore in response to growing demand and a global chip scarcity.
As the world becomes increasingly digital and interconnected, and as the global chip shortage enters its third year, TSMC appears stronger than ever. According to a story published by the Wall Street Journal (WSJ) on Friday, a Taiwanese chip giant is considering constructing a semiconductor facility in Singapore, a major chip-making center.
"A final decision has not yet been taken, and the plan's details are still being discussed, but early discussions entail a big facility whose cost would be in the billions of dollars," the article stated. Currently, it appears that conversations are underway with the Economic Development Board of the government.
The Singaporean government may help fund the plant, according to the WSJ. Since last year, several governments, including those of the United States, Japan, and Europe, have pushed to entice chip manufacturers to establish plants in their nations. Reducing the concentration of manufacturing in Taiwan and preventing China from acquiring cutting-edge technology are other priority for the United States and its allies, according to the WSJ.
TSMC has a capital expenditure budget of $40 billion to $44 billion for this year alone. Plans now include a $12 billion semiconductor plant in Arizona, which is anticipated to get help from a $50 billion chip-manufacturing incentive program. Sony Group Corp. and the Japanese government have partnered with TSMC to establish a new facility in Japan.
Why would it make sense for TSMC to establish a manufacturing in Singapore?
As a result of its talent pool and well-established network of suppliers, Singapore is home to a number of the world's largest chip makers. Global Foundries Inc. and Micron Technology Inc., as well as Infineon Technologies AG of Germany, have a significant presence in the Southeast Asian city-state.
In addition, GlobalFoundries said in 2021 that it will construct a $4 billion chip facility in Singapore that will be operational the following year. In addition, in February, Taiwan's United Microelectronics Corp., the world's fourth-largest contract chip manufacturer, announced intentions to invest $5 billion in Singapore to increase its operations.
A spokesperson for TSMC told WSJ, "TSMC does not rule out any option, but has no clear plans at this moment." According to the WSJ article, for the Singapore project, TSMC is also examining the viability of manufacturing lines that would manufacture seven- to 28-nanometer circuits using older production technology.
Alvin Tan, Singapore's minister for commerce and industry, stated in January that the country accounted for around 5 percent of worldwide wafer production capacity. He stated that semiconductors are "the fastest-growing sector of the electronics industry." The city-state has set a goal to increase its manufacturing industry by 50 percent by 2030, with the semiconductor segment playing a prominent role in its efforts to strengthen its electronics sector.
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