Taiwan Semiconductor Manufacturing Company (TSMC) has begun construction on its US$12 billion semiconductor fabrication facility in Arizona. The company is also reportedly considering building a similar chipmaking plant in Germany.

The Arizona plant will produce the latest-generation 5-nanometre chips, with production expected to start in 2024. The first phase will produce 20,000 wafers a month.

Hsinchu-based TSMC is listed on the Taiwan Stock Exchange. Its American depositary shares are traded on the New York Stock Exchange.

The company began mass-producing the 5nm chips at its Tainan plant last year. There is currently a strong demand for the chips for smartphones (including 5G), networking devices and computers, and there have been chip shortages in many sectors.

In May 2020 TSMC announced that it was building an advanced semiconductor fab in the United States, with the support of the US federal government and the state of Arizona. The project enjoys tax privileges and other incentives.

TSMC already operates a fab in Camas, Washington, and has design centres in Austin, Texas and San Jose, California. The Arizona facility will be TSMC’s second manufacturing site in the US, with total spending on the project, including capital expenditure, estimated at around US$12 billion from 2021 to 2029.

Global supply chain problems during the Covid-19 pandemic, and the high demand for chips, have made production within its own borders a priority for the US. The European Union is also concerned about an over-reliance on deliveries from Asia. At the moment TSMC does not have a fab in Europe, but local press reports in Germany have said that it is actively considering setting up one there.

The company is also considering building its first wafer plant in Japan. US clients account for 70% of TSMC's revenue, while those from Japan account for 4.72% and Europe 5.24%.