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To reduce global chip shortage, TSMC is considering building a new factory in Singapore

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According to The Wall Street JournalTSMC, the world’s largest independent foundry, is considering spending billions of dollars to build a new manufacturing facility in Singapore. With the current chip shortage, TSMC needs to add manufacturing capacity to ensure it can deliver enough advanced chipsets to meet the demand of its top customers, including Apple, Qualcomm and Mediatek.

TSMC Negotiates Construction of New Plant in Singapore to Fix Global Chip Shortage

‘s report The news says TSMC has not yet made a final decision on whether to continue with a new fab and that the plant being built in the US (in the state of Arizona) is currently experiencing delays. A new factory in Singapore would cost billions of dollars and some of the money to build the factory could come from the Singapore government. Those in the know say TSMC is currently negotiating with the country’s Economic Development Board.

A TSMC spokesperson said: “TSMC is not ruling out any possibility, but has no concrete plan at this time.” TSMC and Samsung Foundry are the two largest independent foundries in the world, meaning manufacturers send their chip designs to them to build. For example, Apple designs its A-series and M-series SoCs and transfers production of the components to TSMC. Apple is, in fact, the foundry’s largest customer.
Both TSMC and Samsung will start shipping chips made using their 3nm process nodes in time to include them in consumer products next year. The smaller the process node number, the greater the number of transistors that can be found in a chip. This is important because the greater the number of transistors in a chip, the more powerful and energy-efficient it is.

For example, the A13 Bionic chip that powered the iPhone 11 series was built by TSMC using its 7nm process node. The chip contained 8.5 billion transistors. Compare that to the A15 Bionic chip built by TSMC using its 5nm process node. That chip, used on the iPhone 13 line, contains 15 billion transistors, making it more powerful and energy efficient than older chips.

The now-delayed factory being built in Arizona aims to produce 5nm chips by 2024. That factory would not supply advanced chipsets, as TSMC’s Taiwan-based factories should be producing 3nm chips by 2024. The proposed plant in Singapore would make chips from 7 to 28 nm and these older manufacturing technologies turn out to be chips used for smartphones, cars and other devices.

Ironically, during the current global chip shortage, it has been these older legacy nodes that have been scarce and have increased in price the most. But building factories in other countries can help TSMC stay close to its major customers and is a way to get around some travel restrictions imposed by companies because of COVID. Last year, Global Foundries announced it would spend $4 billion to build a factory in Singapore that would open in 2023.

Singapore is responsible for 5% of global waffle production

Singapore is already home to several chip suppliers, as it has a large talent pool from which these companies can choose, and it has a strong supply chain. The American chipmaker Micron Technology, the German Infineon Technologies and Global Foundries have offices in the country. Trade and Industry Secretary Alvin Tan said in January that semiconductors are “the fastest growing segment of the electronics industry.”

Earlier this year, in February, Taiwan’s United Microelectronics Corp., the world’s fourth-largest contract chip maker, said it would spend $5 billion to expand its production in Singapore. The latter country is home to 5% of the global waffle production capacity. Waffles are made of silicon and are converted into a rod by means of various techniques. The blocks are then cut into thin disks called wafers, onto which extremely thin circuit patterns are etched in a process known as lithography.

After being polished to a mirror finish, the wafers go through several stages and are cut into dies. They are then tested, packed and shipped.

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