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The Finance Base
China

Why TSMC Accelerated the Opening of Its Nanjing Fab

TSMC accelerated its Nanjing fab opening for June 2018 to serve strong local demand, with planned 16nm production and 20,000 12-inch wafers a month.

By TheFinanceBase Team 2 min read
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TSMC accelerated the opening of its Nanjing, China, fab to get closer to strong local semiconductor demand and customers seeking foundry services. In a December 2017 report, the company said it would pull the facility’s opening forward to June 2018. The planned fab was designed for 20,000 12-inch wafers a month, with about $3 billion in investment—not for TSMC’s most advanced production.

Why did TSMC speed up the Nanjing fab?

TSMC cited strong demand in what a December 8, 2017, EE Times report described as the world’s fastest-growing semiconductor market. Opening sooner would put the foundry closer to customers in China, where local access to manufacturing was commercially important.

The logic had an earlier precedent. In a 2002 announcement, TSMC chairman Morris Chang said the company saw both an emerging, potentially large regional IC market and distinctive characteristics in mainland China’s semiconductor market. TSMC believed it would be difficult to win market share there without providing foundry services locally. Its plan at the time was a wholly owned Shanghai subsidiary with an 8-inch fab, capacity of 35,000 wafers per month, and $898 million in total investment, using 0.25-micron or older processes. TSMC’s announcement sets out that earlier strategy.

What changed in the opening schedule and planned scale?

In 2017, TSMC brought the planned opening of its wholly owned Nanjing fab forward to June 2018. The earlier target had been to begin 16nm production in the second half of 2018. The facility was planned to handle 20,000 12-inch wafers per month, with investment of approximately $3 billion, according to EE Times.

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The date was an accelerated opening target reported in 2017; it should not be confused with a separately specified date for full production ramp-up. The report does not establish a final ramp schedule.

Was TSMC moving its most advanced technology to China?

No. The 2017 report described Nanjing as a site for 16nm production, while TSMC kept its most advanced process technologies, key production lines, and core research and development in Taiwan in line with Taiwan government regulations. The report said TSMC planned to start 7nm production in Taiwan the following year.

That distinction matters: the Nanjing investment expanded TSMC’s local manufacturing presence, but the technology boundary described at the time kept its leading-edge processes and core R&D in Taiwan. These details describe the company’s plans and regulatory context as reported in 2017, not a claim about every later process or policy change.

What did the China market figures show at the time?

EE Times quoted IC Insights’ 2017 forecasts that pure-play foundry sales in China would reach $7 billion in 2017, up 16% from 2016, and that TSMC would account for about 46% of China foundry revenue, or roughly $3.2 billion. These were contemporaneous forecasts, not current market measurements.

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Does TSMC still have manufacturing capacity in China?

Yes. TSMC’s 2025 annual report lists two 12-inch wafer fabs at wholly owned subsidiaries: TSMC Nanjing Company Limited and TSMC Arizona Corporation. It also lists two 8-inch wafer fabs at wholly owned subsidiaries TSMC Washington and TSMC China Company Limited. The report identifies Nanjing as providing 12-inch capacity and TSMC China as providing 8-inch capacity.

The current footprint confirms that TSMC continues to operate manufacturing capacity in China, while the 2017 account explains why the Nanjing project was accelerated and what technology and scale were planned then.

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