TSMC builds chips 1/5000 the thickness of a human hair in a fab as big as 20 soccer fields

Top contract chip maker TSMC may have outsmarted rivals Samsung Electronics and Intel in the race to build the tiniest and most powerful chips for smartphones and tablets by building big.

As mobile devices get slimmer and demand increases for more data-processing and power-saving features, chip companies are trying to cram more power into tinier chips and are building futuristic factories, or fabs, to meet global demand.

At a new site the size of about 20 soccer fields in southern Taiwan, Taiwan Semiconductor Manufacturing Co is building foundry facilities to manufacture chips smaller than 1/5,000 the size of a human hair. Dozens are embedded into smartphones.

TSMC plans to invest NT$500 billion (HK$132 billion) and hire 7,000 workers for the new facilities, where the first 20 nanometer chips are expected to start rolling off the mass production line some time early next year.

Rivals Intel and Samsung Electronics, the world’s No 1 and No 2 chipmakers, are also building capacity and spending billions of dollars on new fabs to crack into the lucrative business that the Taiwanese firm dominates.

The foundry business “will continue to grow solidly on the back of a booming mobile industry, and TSMC will see more players in the market, as many are envious of its nearly 50 per cent profit margin”, said Doh Hyun-woo, an analyst at Mirae Asset Securities in Seoul.