Key Apple supplier is one step closer to building its new U.S. factory

Back in May, the Wall Street Journal reported that the world’s largest foundry, Taiwan Semiconductor Manufacturing Co. (TSMC), was going to announce that it was building a U.S. based chip manufacturing facility. Today, Reuters U.K. reports that the U.S. facility moved one step closer to reality. Taiwan’s ministry of economic affairs gave the go ahead for TSMC to proceed with the first phase of building the factory in Arizona with an investment of $3.5 billion. The total cost of the facility is expected to be close to $12 billion.

The country’s ministry of economic affairs has the job of authorizing major investments made overseas by Taiwan companies. TSMC’s application has been approved by the ministry according to an announcement made earlier today. The plant is expected to be operating by 2024 and churn out chips made using the 5nm process. By that year, the most cutting-edge integrated circuits will be made using the 3nm process. TSMC’s Arizona factory will turn out 12-inch wafers with as many as 20,000 a month rolling out of the facilities.

The factory was originally planned by President Donald Trump as a sign that the U.S. would become a leader in tech production. While many U.S. companies design their products in the states like Apple does, the actual manufacturing is usually done overseas in Taiwan or China. For example, the iPhone is designed in Cupertino but is assembled by three Taiwan firms. Trump had asked TSMC to announce its plans prior to the U.S. election as he figured that his chances for re-election would get a shot in the arm if he could announce that the world’s largest chip manufacturer was building a plant in the states. However, it looks as though Trump will be out of office by the time the factory in Arizona starts volume production.

TSMC manufactures most of its chips in Taiwan but it does have older factories in China and Washington state.