Looking to extend its reach into the Chinese semiconductor manufacturing market, Taiwan Semiconductor Manufacturing Corp. (TSMC) has signed an investment agreement to build a 12-inch wafer fab and design service center.
The investment is valued at $3 billion and will be built in Nanjing, China, located in the Pukou Economic Development Zone. Planned capacity for the facility is 20,000 12-inch wafers per month and will begin production of 16nm process technology in the second half of 2018.
TSMC says it accounted for more than half of the global foundry market’s production of 14/16nm technology wafers in 2015 and predicts it will gain further market share at this technology node this year. As a result, more capacity is needed for future development deals, and TSMC has been looking to expand its presence in China as it sees a growing need for more manufacturing in the country. Currently TSMC has more than 100 Chinese customers using its production facility and claims to hold the largest foundry segment market share.
Originally, TSMC submitted plans with the Investment Commission of Taiwan’s Ministry of Economic Affairs back in December of 2015 for the Nanjing facility. According to Len Jelinek, senior director for semiconductor manufacturing at IHS, the move to build this facility is a defensive one because of the increased domestic Chinese opportunity. If TSMC did not build a facility, that would open the door for another foundry, maybe a domestic foundry, to take advantage of the growing need for 12-inch wafers, especially in lieu of the Chinese central government expanding its support for domestic manufacturing companies.
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