TSMC and the municipal government of Nanjing have formally signed a previously discussed agreement to have the Taiwanese semiconductor manufacturer build a 12-inch wafer fab in China.
No less importantly, Taiwan Semiconductor Manufacturing Co. (TSMC) (NYSE: TSM) will be setting up an IC design operation in Nanjing.
Business trumps politics. China has been pursuing an aggressively expansionist political/military course in the South China Sea, agitating many of its neighbors. Taiwan is especially wary of China, given that China considers Taiwan to be a renegade province.
But apparently all is fair in love and semiconductors. TSMC, by most measures the largest IC producer in the world, already operates an 8-inch fab in Shanghai. The company said it has the largest foundry market segment share in China with more than 100 Chinese customers.
TSMC will not only be expanding its physical manufacturing presence in China, but will also start producing chips with some of the most advanced semiconductor processes in the world, at the 16nm and 14 nm nodes.
TSMC has a small handful of rivals in advanced semiconductor production, but most of them are also moving to build facilities in China. Intel Corp. (Nasdaq: INTC), Samsung Corp. and SK Hynix Semiconductor Inc. are also either building or planning advanced wafer fabs in the country.
Given that Chinese factories put together a growing number of finished electronics systems, siting wafer fabs nearby is considered a logically economical step to bring together component manufacturing and system assembly.
— Brian Santo, Senior Editor, Components, T&M, Light Reading