TSMC May Charter its Own Boxship to Transport Chip-Making Equipment

Taiwan Semiconductor Manufacturing Co.(TSMC), the Taiwanese world’s largest contract computer-chip maker, is reportedly planning to charter a container ship to transport manufacturing equipment to its new facility in Phoenix, Arizona. The move would help TSMC reduce the cost of containerized freight for the project.

Given the current sky-high spot rates, conventional booking and transport for the freight would be very costly. “Approximately 4,000 to 5,000 containers will be used, with the total transport cost coming to roughly $110 million,” reported the local UDN newspaper.

Last year, TSMC announced its plans to set up a multi-billion dollar chip manufacturing facility in Arizona. The first plant is currently under construction and it is expected to cost $12 billion. Mass production will start in 2024, with an initial monthly production capacity of 20,000 pieces. This plant will be using five-nanometer chipmaking technology, although TSMC has plans to upgrade to the more advanced and efficient three-nanometer technology in the subsequent factories. The construction cost of these next-generation facilities could be upwards of $23 billion.

The first batch of containers for the first plant is expected to depart in October this year. Considering port delays and land transportation, the goods will be assembled at the Phoenix site at the end of 2021. The items include a clean room, components for air conditioning, electricity, water supply and drainage, and an atomic absorption spectrophometer for the process exhaust system.

Unconfirmed media reports indicate that TSMC chairman Mark Liu has approved the plan. Further, due the strategic importance of TSMC’s plant in the US for Taiwan-US relations, Yang Ming Marine Transport Corp - which is 48 percent state owned - is apparently being considered as the safest partner to ensure shipping is done efficiently. Evergreen and Wan Hai Shipping Lines could be tapped as well. However, TSMC management has declined to comment on what it described as “market rumors.”

TSMC joins the likes of Walmart and Home Depot, which have also decided to charter containerships to overcome supply-chain bottlenecks caused by the Covid-19 pandemic.