TSMC is building and operating its Arizona chip manufacturing site through its subsidiary TSMC Arizona. A subsidiary limits the exposure that a company can face from a large business division, and all funds that flow to the Arizona chip site from TSMC are through this subsidiary. TSMC had held a board meeting in Taiwan at the start of August's second week, which had seen the company approve a $4.5 billion capital injection for the U.S. chip site.
This injection was approved by Taiwan's Investment Commission yesterday and is the second such investment to have cleared the process this year. TSMC's board approved the first chunk of funds in February, and the Commisson approved the decision a month later in March. While the chipmaker's press release announcing the $4.5 billion of funds for the Arizona site did not outline the purpose, local reports from the Taiwanese press claim that they will be utilized for working capital expenses.
These expenses are at the heart of doing daily business, and for firms that generate revenue, they typically involve purchasing raw materials and collecting payments from customers.
TSMC is racing ahead to install its high-end advanced chip manufacturing machines at the Arizona plant. These machines were slated to initially finish installation this year and allow production to kick off in 2024. The U.S. chip plant is designed to manufacture chips on the firm's N4 semiconductor technology process node. This node is part of TSMC's 5nm semiconductor family and is the most advanced version in this generation.
The Taiwanese chipmaker's latest generation of chips fall under the 3-nanometer family. TSMC announced in December last year that it will add a second factory to the Arizona site, enabling it to also build the 3-nanometer chips by 2026. The Arizona fab is estimated to require $40 billion in total investment and produce products that are worth more than this.
TSMC's had a busy September so far as well, as the firm approved a $100 million investment in the shares of British design firm Arm Ltd which recently listed its shares for a public offering. The firm also made a crucial investment in one of the few companies in the world that are capable of manufacturing multi beam mask writers - a crucial upgrade to the semiconductor fabrication process.
As to the fate of the Arizona fab, the latest is that production is delayed and TSMC is installing the high end machines. Dificulties with the site have also encouraged the Taiwanese firm to explore options closer to home for its manufacturing footprint diversifcation. These include Japan where TSMC is allegedly mulling a fab expansion, as it is attracted by the lower costs and cultural familiarity in the Asian economic giant.
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