Taiwan’s GlobalWafers to invest $5 billion in new silicon wafer plant in Texas

The company said the new plant, manufacturing 300-millimetre silicon wafers, would start being built later this year and generate as many as 1,500 jobs in Texas

Updated - June 28, 2022 01:52 pm IST

Published - June 28, 2022 11:42 am IST - TAIPEI

Technician holding chip in tweezers

Technician holding chip in tweezers | Photo Credit: Getty Images/iStockphoto

Taiwan's GlobalWafers Co Ltd will spend $5 billion on a new plant in Texas to make silicon wafers used in semiconductors, switching to the United States after a failed European investment.

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The company said late on Monday the new plant, manufacturing 300-millimetre silicon wafers, would start being built later this year and generate as many as 1,500 jobs in Sherman, Texas.

"With the global chips shortage and ongoing geopolitical concerns, GlobalWafers is taking this opportunity to address the United States semiconductor supply chain resiliency issue by building an advanced node, state-of-the-art, 300-millimetre silicon wafer factory," Chairwoman and CEO Doris Hsu said.

"Instead of importing wafers from Asia, GlobalWafers USA (GWA) will produce and supply wafers locally."

The company added that the investment would be done "phase by phase" based on confirming actual customer demand.

The United States has been encouraging foreign tech firms to manufacture in the country, and the government welcomed the move, with U.S. Secretary of Commerce Gina Raimondo saying it would strengthen economic and national security.

Raimondo on Monday stepped up pressure on Congress to approve $52 billion in funding for chipmakers to expand operations, warning that firms would abandon American expansion plans without the legislation.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), a major Apple Inc supplier and the world's largest contract chipmaker, started construction last year in Arizona where it plans to spend $12 billion to build a semiconductor factory.

While the United States has been successful at attracting Taiwanese tech firms, Europe has not, despite unveiling plans this year to encourage chip firms to invest there.

GlobalWafers said in February it expected its total capital expenditure to reach T$100 billion ($3.4 billion) between 2022 and 2024, redirecting funds for a now-ended 4.35-billion-euro ($4.60 billion) takeover of Germany's Siltronic.

The failed acquisition came as a global shortage of semiconductors has laid bare Europe's dependence on Asian suppliers, which has triggered recent efforts to boost production across the continent.

Germany's Economy Ministry said it was not possible to complete all the steps of the investment review, in particular a review of an antitrust approval granted by China only in January.

The GlobalWafers deal would have created the second-largest maker of 300-millimetre wafers, behind Japan's Shin-Etsu , as the semiconductor industry consolidates.

Germany has become wary of changes to its high-tech supply network after carmakers, one of its major sectors, were hit by the global chip shortage.

GlobalWafers secured a majority stake in Siltronic last year and initially hoped to have the transaction wrapped up in late 2021.

GlobalWafers' Taipei-listed shares were down around 5% on Tuesday morning.

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