TSMC To Hit Back At Critics With 3-nanometer Mass Production Ceremony – Report

Ramish Zafar

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

The Taiwan Semiconductor Manufacturing Company (TSMC) will hold another ceremony this month. It held a large ceremony in Arizona earlier in December to mark the first machines arriving in the plant, in a high profile event that even saw President Biden make an attendance. However, the company is not done celebrating its successes, it seems, as according to reports in the Taiwanese media, TSMC will hold a celebration at its Nan-ke facility in Taiwan next week to officially kick off mass production of its leading edge 3-nanometer semiconductor manufacturing process. The 3-nanometer node has been at the center of considerable controversy this year, with some claiming that it is behind schedule after TSMC's primary rival in the contract chip manufacturing industry Samsung Foundry jumped the gun and announced production before the Taiwanese firm.

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After it marked the occasion of the first machines arriving in Arizona with much pomp and show, voices within Taiwan questioned whether TSMC was shifting its focus to America instead. Lawmakers worried that the new plant would lead to a technology transfer to the United States - which, even to this day, is the backbone of chip manufacturing due to a strong ecosystem of backend equipment and design firms. Taiwanese government officials assuaged these concerns and dubbed them as propaganda spread from Mainland China to harm the relationship between America and Taiwan.

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Additionally, TSMC has been consistently at the center of rumors this year, claiming that its 3-nanometer manufacturing is delayed. Some have accused the company of introducing new 'generations' of technology to cover up these delays. In contrast, others believe it simply does not have enough orders to run the expensive chip manufacturing machines profitably.

According to Taiwanese semiconductor industry sources quoted by the United Daily News (UDN), the event aims to dispel any rumors that TSMC is running behind schedule for 3-nanometer manufacturing.

Cheerleaders performed during TSMC's sports day in 2017. Image: CNA

However, despite the speculation for delays, TSMC's management has repeatedly stated multiple times that its 3-nanometer production is on schedule. Its latest earnings call that discussed the results for the third quarter of 2022 saw chief executive officer Dr. C.C. Wei outline that:

Despite the ongoing inventory correction, we observed a high level of customer engagement at both N3 and N3E with a number of tape-outs more than 2x than that of N5 in its first and second year. We are working closely with our tool supplier to address towards delivery challenges and prepare more 3-nanometer capacity to support our customers strong demand in 2023, 2024 and beyond. Our 3-nanometer technology will be the most advanced semiconductor technology in both PPA and transistor technology when it is introduced. We are confident that N3 family will be another large and long-lasting node for TSMC.

These comments come when the semiconductor industry is facing a historic downturn. Companies like Intel, AMD and NVIDIA have seen their revenues drop significantly as high inflation bites through consumer purchasing powers. TSMC too, has had to adjust its capacity accordingly, and the third quarter conference saw Dr. Wei share that the demand forecasts shared with him by the chip designers were widely different than the demand which materialized.

The 3-nanometer mass production celebration ceremony will also answer any concerns in Taiwan that TSMC is shifting away from its home territory to the U.S. This manufacturing process is the company's most advanced technology to date, and official statements have outlined that it will bring it to the American plant in 2026 - a year after it will have started build these chips in Taiwan in 2025 in Taiwan according to current schedules.

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