TSMC is Building 11 Extra Production Lines in Taiwan Besides $100b Investment in Arizona (Updated with Transcripts)

C. C. Wei makes an effort to assuage public doubts

Taiwan Semiconductor Manufacturing Company (TSMC) chairman C. C. Wei and President William Ching-te Lai held a press conference at the Presidential Office on March 6 to clear public doubts. TechSoda produces takeaways for English readers and will update the transcript translation later.

Key takeaways (Video credit: PTS):

TSMC Chairman C.C. Wei announced that TSMC will invest $100 billion in the U.S. to establish new manufacturing lines and R&D centers due to customers’ demand.

This investment program is an important step in TSMC's continued expansion. Wei said that TSMC's customers have very high demand (the capacities of the fabs in Arizona are fully booked this year and next year), which necessitates the establishment of new manufacturing facilities (3 more fabs, 2 advanced packaging plants, and 1 research center) in the U.S.

Taiwan Government's Support

The Taiwan government has indicated that it will fully support TSMC's development in Taiwan, including providing resources such as land, utilities, and human resources.

Establishment of R&D Center

Wei said that TSMC's R&D center in the U.S. will focus on enhancing processes on the production lines. He emphasized that TSMC's R&D center in Arizona will not affect Taiwan's core competitiveness.

TSMC's Competitiveness

Wei said it’s ok that the US government offered no subsidies for the US$100 billion investment, but TSMC's request is “fair competition”. He emphasizes that TSMC is not afraid of competition and does not need subsidies to succeed. He said he is more worried about talent shortage.

Future Development

Wei said that TSMC will continue to invest in new technologies and production lines in Taiwan and the U.S.. He emphasized that TSMC's development will continue to drive Taiwan's economic growth and competitiveness.

Transcript:

President Lai’s opening (summary): Four years ago, TSMC made the largest foreign direct greenfield investment in the U.S. in Arizona. Recently, Chairman Wei announced further expansion plans at the White House. This investment will contribute to next-generation AI and forward-looking applications, marking a historic moment in Taiwan-U.S. relations.

Taiwan, despite facing challenges from authoritarian regimes, stands as a strong democracy admired internationally. TSMC's achievements reflect the pride of Taiwan and the success of its semiconductor industry, developed over 50 years through joint efforts of industry, government, and academia.

President Lai said he visited TSMC's founders and leaders for their advice and thanked the people of Taiwan for their support. TSMC's growth has made Taiwan more competitive and powerful, enabling its enterprises to engage in global cooperation.

Taiwan's industries have expanded globally, and TSMC's success allows Taiwan to confidently expand into the American continent. This will further strengthen Taiwan's position and market its products worldwide.

President Lai thanks Chairman Wei for keeping the government informed about TSMC's U.S. investment plans and for explaining these plans upon his return from the U.S.

CC Wei: President Lai instructed me yesterday to clearly communicate with everyone about why we committed to investing $100 billion in the United States. I'd like to share our thoughts on this.

TSMC's approach is straightforward: whenever we build production lines outside of Taiwan, it's always to meet customer demand. We've consistently adhered to this principle. We went to Japan because of Japanese customer demand, to Germany because of German customer demand, and four years ago to the U.S. because of American customer demand.

Now, we're increasing our investment. You might wonder why. It's because the demand from American customers is exceptionally high. I won't disclose specific numbers, but before making this major investment, we conducted extensive analyses and communicated with all our customers. We found that our current expansion plans in the U.S. were insufficient to meet their needs. Therefore, we began internal discussions about why we should expand production lines in such an expensive location. However, customer demand has always been our top consideration.

Of course, we also consider other factors. I've seen many people explaining this on my behalf, but the main reason is indeed customer demand. Second, support from local governments is indispensable. Just like TSMC's success in Taiwan, our colleagues have worked hard, but without government support and regulatory backing, we wouldn't have succeeded. We also wouldn't have succeeded without public support. TSMC has always adhered to a principle: our first responsibility is to our shareholders, the second is to our employees, and the third is our commitment to society. These principles, taught by our founder Morris Chang 37 years ago, have never changed—integrity and honesty are paramount.

So, to answer why we're expanding in the U.S., it's because of customer demand. Our current production lines are fully booked, next year's are also full, and the lines we plan to build for the following year are already reserved. It's that simple. Other considerations include costs, local talent, and local water and electricity supply. We cooperate closely with local governments and universities to cultivate more talent. Similarly, in Taiwan, we collaborate with universities and appreciate the support from the Taiwanese government, which ensures we have no worries about water, electricity, land, or talent.

Now, I'd like to report to you that when I announced the additional $100 billion investment in the U.S., it includes building three new factories, two advanced packaging facilities, and a research and development center. You might not be familiar with what a research and development center is. TSMC's production lines differ from those around the world, especially compared to our competitors. Once our production lines start manufacturing a technology, they continuously work on research and development, advancing every year. I can confidently say that my competitors lack this capability; they must rely on dedicated R&D efforts.

So, I thought, why not integrate the personnel who improve manufacturing processes into our R&D efforts? This is one of our significant advantages. For instance, our 5nm technology was developed by true R&D talent, our 4nm was developed by production line personnel, and our 3nm was developed by R&D talent again. Our production lines can continue to advance, which is what we mean by R&D personnel.

As for true R&D, it involves transitioning from 2nm to 1.6nm, 1.4nm, 1.2nm, and now we're planning to reach 1.0nm. This is being done by about 10,000 dedicated R&D personnel, which is a major effort. It's not something that can be achieved by just 100 people on a production line. However, we hope to utilize local talent in the U.S., as American talent is excellent. Our customers also need us to be there, and just like in Taiwan, we aim for our production lines to advance independently without relying on Taiwan's R&D support.

Now, let me explain our $100 billion investment: it includes three new production lines, two advanced packaging facilities, and a research and development center. I especially emphasize the R&D center because we need to purchase more equipment to continue advancing. That's the situation.

In Taiwan, I mentioned earlier that we are building 11 production lines this year. You might wonder if our $100 billion investment in the U.S. will affect these plans. It won't. We will continue to build because our current capacity is still insufficient. Yesterday, I even asked President Lai to help us find more land so that TSMC can quickly build more production lines. My current capacity is not enough, and I'm not just talking about financial considerations; I'm talking about meeting demand.

It's as simple as “not enough!” That's what it was, and all of my clients who were in the A.I. business came to us, and they all asked us to commit to a very large number.

I can't help it because there are still some problems with the land but fortunately, President Lai promised to help so we'll have more than ten production lines in the next few years.

We'll have more than a dozen production lines, and we'll have to keep investing, and with this $100 billion, I have to tell you, if our projections aren't enough, I will have to see how my competitors respond to the demand.

So I'm sorry to say it again, it's not enough. I hope you'll bear this in mind. Will the investment affect Taiwan's investment? No. Taiwan's investment in building production lines is still not enough.

That's all I have to say. If you have any questions, please feel free to ask.

Q&A

Q1: I would like to ask the President whether the President's Office had any prior knowledge of TSMC's investment in the U.S. It has also been rumored that the President visited Morris Chang, Chairman Wei, and Lin Chuan (TSMC independent director) to exchange views on the layout of the semiconductor investment. So, did President Lai receive any advice at that time? Thank you.

President Lai: Thank you for your question. As I mentioned in my speech earlier, I'm very grateful to Chairman Wei for maintaining close communication with the government over the past period of time.

At the same time, the government has been able to fully understand TSMC's investment plans in the U.S. In addition, when I visited Mr. Chang Chung-mou, in addition to paying my respects to him, I also asked him for his advice, which of course he did.

Of course, I'm not at liberty to relay his opinions here, but I can tell you that every time TSMC makes a move to strengthen its position, it makes TSMC more competitive.

In addition to strengthening TSMC's competitiveness, it also gives Taiwan's other companies the opportunity to enter the international arena, engage in more cooperation and exchanges with the rest of the world, and further develop Taiwan's economy.

Chairman Wei has just explained to you that he's going there at the request of his customers.

Even if the three new factories are built and the 11 production lines in Taiwan are completed, we will still be unable to satisfy our customers' needs.

I think we all know that from Chairman Wei's explanation.

Q2: With TSMC's expansion of its investment in the U.S., will Taiwan be able to get any substantial commitment from the U.S. side, especially on military security, which is a concern to the people of Taiwan? Will Taiwan not be affected by the Trump administration's reciprocal tariffs? Also, has TSMC's upcoming $100 billion investment in the U.S. been vetted by the Investment Commission?

President Lai: I must report to the Taiwanese people that those who best understand and care about TSMC's development are indeed the people within TSMC itself. As mentioned earlier by our Chairman, TSMC's strategic layout is necessary for its future development.

Secondly, the government wants to clarify that during TSMC's investment process in the U.S., there was no pressure from the American side. I also want to emphasize that this is based on Taiwan's security considerations.

After President Trump took office, he immediately held a four-party meeting. Recently, during his summit with Japanese Prime Minister Ishiba Shigeru, President Trump publicly stated that peace and stability in the Taiwan Strait are essential elements for global security and prosperity. He emphasized that no country should attempt to change the status quo in the Taiwan Strait through force or coercion. Similar assertions have been continuously made by various officials in President Trump's administration in Congress and in society.

Q3: Chairman Wei just emphasized the so-called “true R&D center” and said it wouldn't affect Taiwan's capital expenditures. Is it true that this investment of US$165 billion won't affect Taiwan's capital expenditures and the timeline for the construction of all the plants in the north, central and south of Taiwan, including Kaohsiung, and the so-called real R&D center? Also, does that mean that the first fab for 1.0nm process will stay in Taiwan?

Wei: There seems to be some confusion about the difference between a true research and development center and a research center. First, if you look at Taiwan, we have about 10,000 people involved in R&D. In the U.S., I have committed to establishing a team of about 1,000 people. The main purpose of this team is to enable the U.S. production lines to continue advancing without needing to consult Taiwan on every matter. This is how our production lines have always operated.

In fact, what we do there is also a form of R&D. For example, transitioning from 5nm to 4nm—don't you think that's R&D? You also had another question about capital expenditure. I said it wouldn't affect Taiwan's plans because everything we do is based on customer demand. Our investment plans are very cautious, and despite the large numbers, they are still insufficient. Therefore, Taiwan's plans won't be impacted; instead, we want to accelerate them.

I even personally asked President Lai to help us, as the main issue is that we lack land. What I fear most is that we also lack talent. Our colleagues at TSMC work hard, and we always advocate for providing them with a good living environment so they can feel secure and have children, so that we can secure the supply of engineers (editor’s note: he is making a joke here).

President Lai: I can add to that. The government will definitely help TSMC to get the land it needs to build a factory in Taiwan and supply it with enough water and electricity, human resources, and talents.

Q4: The first question is whether there will inevitably be a generational gap in the technologies used for production in Taiwan versus the U.S. or other countries. The second question is whether moving the R&D center overseas will gradually erode Taiwan's core competitiveness, and how TSMC will ensure that it maintains its competitive advantages in Taiwan in the future. This is a concern for many Taiwanese people.

Furthermore, there is a question about President Trump potentially repealing the CHIPS Act. What would TSMC's view be if the CHIPS Act were repealed? Also, has TSMC secured any tax incentives or other subsidies from the U.S. government in exchange for committing to such a large investment?

Wei: First, I'll address the second question: whether TSMC received any commitments from the U.S. government for additional subsidies in exchange for its large investment. I want to be honest with you; all I ask for is fairness. I believe this is the same for all TSMC colleagues. We are not afraid of competition, and wherever we build production lines, we strive to be the best. Therefore, we don't need subsidies, and we're not afraid of not receiving them. We didn't invest in the U.S. because of subsidies; it was due to customer demand.

The most important thing is that TSMC's success comes from working closely with our customers. Many of our technological advancements have been developed through discussions with customers, and they trust us. We work together with customers to develop technologies, which is not something only one company can achieve. Our former Chairman Morris Chang once talked about the "Grand Alliance," where TSMC collaborates with suppliers, customers, and internally to drive progress quickly. This is why we outperform others.

Regarding your first question about whether establishing a research center in the U.S. will lead to a brain drain in Taiwan, I'd like to clarify that our R&D efforts are designed to support local production lines. While we are expanding in the U.S., our most advanced technologies will remain rooted in Taiwan. We are committed to maintaining Taiwan's core competitiveness while also ensuring that our U.S. operations can advance independently.

The issue of maintaining Taiwan's core competitiveness involves the "Mother Fab," which is a crucial step in preparing for mass production. The Mother Fab optimizes technologies developed by R&D personnel, but these technologies are not yet perfect because they haven't been tested on a large scale. You see, all technologies must undergo rigorous testing to be complete. Our founder, Morris Chang, once mentioned the concept of the "experience curve," which means that having an experience curve allows you to progress. Therefore, we use the Mother Fab to optimize technologies before they are passed on to production lines. Once the production lines receive these optimized technologies, they continue to improve them.

As I mentioned earlier, this is somewhat of a trade secret, so I hope you won't report it. If my competitors hear about it, they might start doing the same thing, which would be a headache. Every time we optimize technologies at the Mother Fab and pass them to production lines, the production lines further refine them. During this refinement process, we modify machinery, which isn't as simple as just buying a new appliance. At TSMC, when we modify machinery, we change everything from the piping to the wiring. Only after these modifications can we expand a single production line into two or three, including expanding our production lines to the U.S. So, you can understand our entire process better if you have the chance to visit TSMC. We would be happy to explain it more clearly then.

End of Press Conference

Editor’s note: What is a Mother Fab? SemiVision explains here:

TSMC’s Mother Fab: The Heart of Advanced Process Development