TSMC prepares for 1nm production as price hikes drive most semiconductor industry growth

Daniel Sims

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Forward-looking: As TSMC's 3nm production matures and the company prepares to enter 2nm over the next few years, reports indicate it will soon begin laying the foundations for 1nm. Despite the chip giant's investments in Western countries like the US and Germany amid geopolitical tensions in the Pacific, TSMC will continue building its bleeding-edge foundries in Taiwan.

Taiwan outlet United Daily News (UDN) reports that TSMC has begun plans to build a 1nm fab at the science park in Chiayi, Taiwan. The move indicates confidence in the company's semiconductor advancement and the country's continuing dominance in chip production.

Sources told UDN that the company submitted a proposal for a 100-hectare construction to the local government that administers Chiayi, split 40/60 between an advanced packaging plant and a 1nm fab, respectively. The city prevailed over numerous other bidders in Taiwan. TSMC declined to comment on the rumors.

Tech industry figures and Western officials have expressed worry over the supply chain's heavy reliance on Taiwan-based facilities. TSMC supplies the majority of the world's most advanced chips, but China wishes to reunify with Taiwan by force if necessary.

The US hopes that projects like TSMC's planned Arizona fab will make its supply chain more resilient, but it appears that the tip of the Taiwan-based giant's spear will remain in its home country. The decision follows the recent electoral victory of presidential candidate Lai Ching-te, who favors Taiwanese sovereignty.

Industry estimates put TSMC's investments in 1nm at over 1 trillion TWD, or around $32 billion. Last month, TSMC unveiled a roadmap at the IEDM conference, confirming its ambitions to start producing 1nm transistors by the end of this decade. Together, 1nm and 3D-stacked heterogeneous integration of chiplet-based designs could create processors with over one trillion transistors.

In related news, the company's Q4 2023 earnings report indicates that growth mostly came from higher wafer prices. TSMC's 2023 shipments were down from the previous year, and more expensive wafers made up a higher proportion of its sales, driving the average price per wafer up by 22 percent from $5,384 to $6,611.

As a result, fourth-quarter 2023 revenue only suffered a slight year-over-year dip. TSMC's dominance in 3nm chips was likely a significant factor. Analysis from Bernstein Research indicates that virtually all of the semiconductor industry's recent growth comes from rising prices.

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You can bet they have an "out" if China is stupid enough to try to take them over. Be it blowing up the foundries or whatever.
 
You can bet they have an "out" if China is stupid enough to try to take them over. Be it blowing up the foundries or whatever.

I believe the world dependancy of Taiwan chip making capabilities and how delicate that factories are make Taiwan some type of balance center in the China/US relationship... China can't take over Taiwan because western economies rely on it and would retaliate, US can't interfere on China/Taiwan conflict because China could in theory also retaliate.

Loosing TSMC would take every high tech industry years to recover, because even one year without TSMC capabilites would make a deep impact.
It's a loose/loose situation.
 
I believe the world dependancy of Taiwan chip making capabilities and how delicate that factories are make Taiwan some type of balance center in the China/US relationship... China can't take over Taiwan because western economies rely on it and would retaliate, US can't interfere on China/Taiwan conflict because China could in theory also retaliate.

Loosing TSMC would take every high tech industry years to recover, because even one year without TSMC capabilites would make a deep impact.
It's a loose/loose situation.
I always kind of thought China would do it this way. "Hey Taiwan, we're going to put ships in the sea but not to invade you, to protect you. We'll send some ambassadors to "assist" you but will have a hands off approach." (Remember how well that worked with Hong Kong?)
 
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