Taiwan Semiconductor Manufacturing (TSMC), a major supplier to Apple, announced it will build a $12 billion chip factory in Arizona.
The move by the world’s biggest contract manufacturer of computer chips coincides with an effort by the administration of President Donald Trump to bring more foreign manufacturing to the United States, Reuters reported.
The plant will create as many as 1,600 jobs and produce the most sophisticated 5 nanometer chips, TSMC said in a statement. The Taiwan company also has an older chip facility in Washington state.
TSMC said in a statement that construction on the facility would begin in 2021 and that it would be able to process up to 20,000 silicon wafers per month. Each wafer can contain thousands of individual chips.
“This project is of strategic importance to a vibrant and competitive U.S. semiconductor ecosystem that enables leading U.S. companies to fabricate their cutting-edge semiconductor products within the United States,” TSMC said.
TSMC is the world’s most valuable semiconductor company with a market capitalisation of $255 billion that exceeds Intel.
The move comes after the Commerce Department drafted a rule that, if implemented, could severely restrict sales of chips by TSMC to blacklisted Chinese telecoms equipment maker Huawei, a key customer.
TSMC makes the chips that power Apple’s iPhones, and the iPhone maker works closely with the chip manufacturer to become the first to take advantage of new advances in its chip-making processes.
While Intel has major manufacturing operations in the United States, it supplies only its own chips rather than making them for outside customers.
The Trump administration has been in talks with both Intel and TSMC to build a plant in the United States. One of the people said Intel would have been a problematic choice, because its customers would see Intel as both a supplier and a rival.
Intel last week said it was in discussions with the Department of Defense about improving domestic sources for microelectronics and related technology.