TSMC begins mass production of its advanced 3-nanometre chips amid US-China tech war
- TSMC, the primary chip maker for Apple, has started bulk production of its most advanced 3-nanometre chips in southern Taiwan
- The company’s recent move to diversify production overseas has raised alarms in Taiwan that this would undermine the island’s strategic importance
The primary chip maker for Apple began bulk production of advanced 3-nanometre chips at its Tainan campus in southern Taiwan. In doing so, TSMC follows Samsung Electronics Co in gearing up on production of a technology that is expected to control the next line-up of cutting-edge devices from iPhones to internet servers to supercomputers.
TSMC is moving ahead on the next generation of chipmaking as companies with less clout smart from cratering demand amid fears of recession and uncertainty over the impact of US sanctions on China’s economy. TSMC this year reduced its capital spending plans by at least 10 per cent to US$36 billion, and some analysts warn it may further delay expenditure on expansion in 2023.
On Thursday, TSMC chairman Mark Liu expressed confidence in the longer-term outlook for chip demand and promised to build future generations of 2nm chips in the Taiwanese cities of Hsinchu and Taichung.
“The semiconductor industry will grow rapidly over the next decade, and Taiwan will surely play an even more critical role in the global economy,” Liu said. Demand for the 3nm chips is “very strong”.
Taiwan is home to more than 90 per cent of the manufacturing capacity for the world’s leading-edge chips. Global policymakers and customers are increasingly leery of their technological reliance on an island Beijing has threatened to invade and have pushed TSMC to shift some production abroad.
TSMC’s recent move to diversify production overseas has raised alarms in Taiwan that this would undermine the island’s strategic importance over the long term. Taiwanese President Tsai Ing-wen said earlier this week that moves by TSMC to build factories overseas is a sign of Taiwan’s power abroad, rather than a threat to local industry. TSMC’s plan to domestically produce 2nm chips is a nod to calls that the island’s firms continue to keep the most advanced chipmaking technology at home.
“Mass production of 3-nanometre chips is the fruit of decades-long collaboration with the local supply chain,” Liu said.
Samsung began mass production of 3nm semiconductors in June in an uphill bid to catch up to TSMC in the contract chipmaking business and meet growing demand for high-performance devices that consume less power.
Chips carrying transistors with smaller line widths are generally more capable and power-efficient. TSMC said its 3nm processes offer better performance than its 5nm chips, while requiring about 35 per cent less power. The 3nm technology will help create end products with a market value of US$1.5 trillion within five years, Liu said.
TSMC’s growing dominance of high-end chipmaking coincides with US sanctions on China’s semiconductor industry, intended to curb Washington’s geopolitical rival.
China claims Taiwan as part of its territory and regularly threatens to invade to prevent its formal independence. Recent military exercises held by Beijing around Taiwan have reignited concerns about the world’s dependence on the island for semiconductors. That is because China claims Taiwan as part of its territory and regularly threatens to invade to prevent its formal independence.