TSMC (Taiwan Semiconductor Manufacturing Company) is currently working towards building a new chip plant in Arizona, US. While the world’s largest contract chipmaker is investing heavily in the region, it is confident that the rest of its customers would fill in any losses in orders or revenue after losing Huawei due to the recent US sanctions.
At the moment, TSMC is still supplying Huawei for its previously placed orders. However, the company is confident that the rest of its major customers like Apple, will step up later on. Furthermore, TSMC is also studying the latest restrictions that are facing by the US and hope that the situation resolves soon. Despite the rocky start with Coronavirus pandemic and US regulations, the company is still going ahead with its planned expansion.
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The semiconductor giant is still planning on spending as high as $16 billion on capacity upgrades and technology in 2020. Notably, the new plant being opened in Arizona despite higher costs will also involve a sizeable investment of $12 billion. The US government has agreed on various incentives to have the foreign chipmaker to create jobs and produce sensitive components domestically.
In other words, the risk involved in having electronics made outside of the US would be lower, which will also make monitoring the technology easier as well. Huawei has always been one of TSMC’s largest customers. The company would stand to lose a noticeable chunk of its revenue and orders due to the restrictions. But, other customers and now, even local orders within the US might help cushion the blow.
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