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April 27, 2017

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Reports of TSMC's US plant rattle Taiwan

TAIPEI, Taiwan -- Government officials and pundits were scrambling on Monday to address reports that Taiwan's top chipmaker may build its most advanced plant yet in the U.S. instead of in Kaohsiung.

Technology Minister Chen Liang-gee (陳良基) rushed to assure the public after media reported that Taiwan Semiconductor Manufacturing Company (TSMC) was considering forgoing Taiwan as an location for a new NT$500 billion 3-nanometer (nm) chip fab.

He said TSMC management told him that investing in Taiwan remained their top priority and there were no plans to move the plant to the U.S.

TSMC had previously announced plans to build a 3nm semiconductor plant at a science park in Kaohsiung, but the company was reportedly held back by Taiwan's Environmental Impact Assessments (EIAs). According to the United Daily News, there were fears it would fail to pass the assessments in time to meet its scheduled start date for the advanced chip process's mass production in 2022.

The report cited unnamed sources familiar with the matter who said factors prompting TSMC to switch locations for the manufacturing site include the EIAs taking too long to complete, unstable electricity supply and air pollution regulations in Taiwan.

Chen said he had called TSMC Chairman Morris Chang (張忠謀) at noon and spoken for 10 minutes. Chang emphasized that investing in Taiwan was TSMC's top choice and that there were no plans to build U.S. plants, according to the minister.

"The Technology Ministry will actively communicate with local governments and concerned central agencies to anticipate and plan out the company's demands regarding water supply, electricity needs and land availability," Chen said in a statement.

"(We) will completely cooperate with TSMC to satisfy their demands on building the manufacturing site, while building a quality environment with talent and advanced technology that will make it easier for high technology companies to invest in Taiwan," Chen said.

According to United Daily News, the ministry said the 3nm fab will still have to pass EIAs, but the Executive Yuan will shorten the time required to process TSMC's assessments and negotiate with the Economic Ministry to provide stable electricity.

"TSMC is Taiwan's baby, and we cannot do without them. Taiwan needs TSMC to catapult the country onto a global competitive stage," said Technology Ministry official Chiu Chiu-hui (邱求慧).

"The ministry has suggested patches of land in Tainan or Kaohsiung that TSMC could use, but where to locate their 3nm fab is their decision … we will try to accommodate their demands, but we will respect their decision as delayed timing could cost a company its competitiveness."

TSMC is the world's largest contract chipmaker and a major supplier to Apple Inc. With the introduction of the 10nm wafers, TSMC is expected to secure orders for its A11 processor for the next generation of iPhones, which are reportedly scheduled for launch in the second half of this yea.

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