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Taiwan to keep producing its most advanced chips domestically
Taiwan will keep producing its most advanced chips domestically, according to Deputy Foreign Minister Francois Chih-chung Wu.
The island makes over half of the world’s semiconductors, including nearly all top-end chips, and Wu said the most advanced technology would stay in Taiwan.
He cited challenges in replicating TSMC’s manufacturing culture overseas and said the best way to protect supply chains is to prevent conflict.
Wu said Taiwan aims to remain a key player in the global semiconductor industry, even as China increases pressure and the US calls for more production abroad.
TSMC has invested in fabs in the US, Japan, and Germany, but these efforts remain closely tied to its domestic industry.
He also noted that the US recently proposed a split in chip production, but Taiwan rejected the plan.
🔗 Source: Agence France-Presse
🧠 Food for thought
Implications, context, and why it matters.
TSMC advanced nodes will stay Taiwan-centric through at least 2028
- Arizona’s gigafab (a large-scale semiconductor fabrication complex) targets 3nm in 2028 and 2nm in 2029 1. A16, approximately 1.6nm, stays in Taiwan through at least 2028.
- The first Arizona fab (fabrication plant) makes 4nm chips as of early 2025 1. Its 3nm and 2nm runs are not planned until 2028 and 2029 1.
- Advanced packaging (methods for tightly combining multiple chips) stays concentrated in Taiwan for now 23. At the Arizona site, U.S. equipment installation is expected by late 2027 at the earliest 2. A first dedicated U.S. site is unlikely to break ground before Q3 2026 3. CoWoS (Chip-on-Wafer-on-Substrate) remains in Taiwan while U.S. efforts start with SoIC (System on Integrated Chips) 3.
- Costs in the U.S. run higher 1. TSMC pegs construction at four to five times Taiwan, with U.S.-made chips at least 50% more 1.
Opportunities for equipment and materials suppliers near Arizona
- Commerce awarded $32.59 billion across 49 projects to 33 companies 4. Recipients include suppliers of silicon wafers and silicon carbide substrates 4. Funding also reached makers of fused silica/ULE glass and ultra-high-purity isopropyl alcohol (IPA) 4. Dry vacuum pump vendors plus advanced packaging and test providers were included too 4.
- Han’s Tech and Foxsemicon, engineering services and equipment integration providers that supported Arizona’s first fab, could see better margins as the second fab builds out in 2025 3. Ground-breaking is slated for April, with activity ramping after mid-year 3.
- Amkor’s $400 million advanced packaging facility near TSMC Arizona creates room for equipment suppliers and test service firms 4. Production is expected in 2028 2.
- CHIPS (Creating Helpful Incentives to Produce Semiconductors) Act grants have already gone to suppliers of fused silica glass, diamond cooling substrates, and vacuum pumps 4. These awards open a path for specialized firms to access funding through 2026 4.
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