UPDATE 1-TSMC starts volume production of most advanced chips in Taiwan

(Adds Chair’s comments; paragraph 4)

TAINAN, Taiwan (Reuters) – Chipmaker Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) began mass production of cutting-edge chips in southern Taiwan on Thursday, its chairman said, adding production capacity on the island. said to continue.

The long-awaited mass production of chips with 3-nanometer technology comes under the spotlight of domestic and international investment plans of the world’s largest contract chip makers. TSMC is the dominant maker of advanced chips used in everything from mobile phones to fighter jets.

TSMC Chairman Mark Liu said at a ceremony to mark the expansion of production and capacity in the southern city of Tainan, “TSMC has invested heavily in Taiwan, continuing to invest in the environment and prosper, while at the same time maintain leadership.

Liu said the demand for the company’s 3-nanometer chips is “very strong,” driven by new technologies such as 5G and high-performance computing products. He didn’t elaborate.

Earlier this month, TSMC announced plans to more than triple its investment in a new Arizona factory to $40 billion. This is his one of the largest foreign investments in US history.

The Taiwanese company, which counts Apple Inc and Nvidia Corp as major customers, is also building a chip factory in Japan and says it is in the early stages of considering a potential expansion to Germany.

As an apparent response to concerns that TSMC’s overseas investments would undermine Taiwan’s key position in semiconductors, Liu said production was planned for TSMC “to develop advanced technology and expand its capabilities in Taiwan.” It shows that we are taking concrete actions.

The Taiwanese government has dismissed concerns about the chip industry’s tendency to “say goodbye to Taiwan,” saying Taiwan’s position as a major semiconductor producer and maker of cutting-edge chips is stable.

Mass production has been successful and yields are good, Liu said, adding that the new 3-nanometer technology will produce end products with a market value of $1.5 trillion within five years.

TSMC said it is working on building a fab for its next-generation 2-nanometer chips that will be manufactured in northern and central Taiwan.

TSMC has repeatedly said it will keep most of its manufacturing in Taiwan. (Reporting by Yimou Lee and Ann Wang; Editing by Stephen Coates)

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