Image Credits - pr.tsmc
Taiwan Semiconductor Manufacturing Company (TSMC) continues its aggressive global expansion, with major backing from various governments. The company has received NT$62.5 billion in subsidies, primarily from Japan and China, as it sets up new manufacturing facilities in these countries. These subsidies are earmarked to offset costs related to real estate, plants, equipment purchases, and operational expenses for new production sites in Kumamoto, Japan, and Nanjing, China.
Semiconductors are now recognized as critical strategic resources, prompting many governments to bolster their domestic industries. TSMC’s cutting-edge technology and dominant market position have made it a prime target for global investments. In addition to its initiatives in Japan and China, TSMC is also building a facility in Arizona, USA, and increasing its 28nm production capacity in China. Department of Commerce has pledged a subsidy of $6.6 billion for the Arizona plant, although TSMC has yet to receive these funds.
TSMC’s expansion into Europe is also making headlines, with the recent groundbreaking of the European Semiconductor Manufacturing Company (EMSC) in Dresden, Germany. This event was marked by the presence of German Chancellor Olaf Scholz and European Commission President Ursula von der Leyen, who announced the European Commission’s approval of €5 billion in German subsidies have been allocated to support the new facility.
The Kumamoto plant in Japan is scheduled to commence mass production in the fourth quarter of this year, featuring a diverse array of advanced process technologies. Meanwhile, the Arizona factory is progressing, with U.S. subsidies still under negotiation.
As TSMC faces the potential for increased costs due to its global expansion, the company is implementing strategic pricing, securing ongoing government support, and leveraging its technological leadership. TSMC is confident in reaching its long-term goal of maintaining a gross profit margin above 53%, underscoring its positive outlook for future growth.