Has the Texas factory location been decided? TSMC is rumored to have spent US$45 billion to build a factory here, launching a war with Samsung over people and resources.

It is rumored that TSMC’s Texas plant is located in Sherman City. (Reuters)

[Compiled by Wei Guojin/Taipei Report] BusinessKorea reported that according to local Texas media and industry sources, TSMC is seriously considering Sherman City, Grayson County, Texas, as a new semiconductor production center. This move will be closer to Samsung Electronics’ existing base in the United States. If TSMC does set up a new factory in Sherman, near Samsung's Austin and Tyler plants, the competition between the two companies for customers, skilled labor, and infrastructure such as water and electricity will become fierce.

According to reports, economic development documents released by the Texas government show that an unnamed company plans to invest US$45 billion in Sherman to build two wafer fabs, employ 5,000 employees, and start production in 2029. Although the relevant documents did not disclose the name of the company, TSMC Chairman Wei Zhejia confirmed last month that a due diligence team had been dispatched to inspect the new factory site in Texas. Major U.S. customers are seeking additional capacity, while TSMC is also evaluating expansion opportunities outside of Arizona, he said.

One of the reasons why TSMC is interested in Sherman City is Taiwan's semiconductor ecosystem in the region. Global Semiconductor, Taiwan's largest silicon wafer manufacturer, already has a large-scale production facility in Sherman City, while KYEC, a major semiconductor testing company, is setting up its first U.S. factory in nearby Fort Worth to test Huida wafers. TSMC may benefit from Taiwan-related supply chains covering wafer production and semiconductor testing to improve logistics and production efficiency.

The region also has a sizable semiconductor industry. Texas Instruments is building four 300mm (12-inch) wafer fabs in Sherman, with an investment of up to US$40 billion. If TSMC sets up a factory there, in addition to its Phoenix, Arizona, factory, it will have multiple production bases in the United States, which can more flexibly respond to the local chip needs of major American technology companies.

The report pointed out that Sherman is only 300 kilometers, or a three-hour drive, from Tyler, where Samsung Electronics is building a wafer factory. As TSMC and Samsung Electronics expand production capacity in Texas, the two technology giants are expected to compete for experienced engineers and construction workers. They will also compete with each other for access to electricity and water, resources that have always been an infrastructure challenge in the state. The two sides will also intensify competition for state tax breaks, subsidies and other investment incentives.