Demand for semiconductors continues to remain at record-high levels. As a result, many semiconductor manufacturers are considering new avenues of expansion in order to better meet the need for chips. One major producer has their sights set on two countries in particular: Japan and the United States.
On Thursday, Taiwan Semiconductor Manufacturing Co signaled its plans to pursue new foreign expansion in order to meet the global demand for semiconductors. The company, which is the largest producer of semiconductors in the world, is anticipating that demand for new chips will continue to be high as the global economy recovers from the Covid-19 pandemic. Already the company has posted record quarterly results and expects even higher revenue in this current quarter.
In their analyst call on Thursday, TSMC said they would be expanding production capacity in China and is not ruling out a “second phase” expansion at their new, $12 billion facility in Arizona. Additionally, the company said they would be reviewing plans to create a specialty technology wafer fabrication plant in Japan.
TSMC’s new expansion plans come as many auto and tech manufacturers have had to cut production due to a lack of semiconductors. The company’s plans are also fueled by growing tensions between nations like the U.S. and China. Taiwan has a high concentration of semiconductor production facilities and is quite close to China, which has long claimed Taiwan to be a part of their country and has not ruled out military action in order to bring the island under their control.
TSMC chairman Mark Liu said that the company is “expanding our global manufacturing footprint to sustain and enhance our competitive advantages and to better serve our customers in the new geopolitical environment…While our overseas fabs are not initially able to match the costs of our manufacturing operations in Taiwan, we will work with governments to minimize the cost gap.”