Taiwan Semiconductor Manufacturing Co. (TSMC) plans to build its next fab for chips made at the 5nm to 3nm technology node by 2022.
TSMC's new fab site will be built in a new science park planned by the Taiwan government near the city of Kaohsiung.
TSMC will need 50 to 80 hectares (123 to 198 acres) of land for an investment worth about NT$500 billion ($15.7 billion).
TSMC is pushing the Taiwan government to have land and supplies of electricity ready in time for the new project. In the past, TSMC has faced shortages of water and power in Taiwan, where the company still does most of its production.
TSM is still undecided on whether it will adopt extreme ultraviolet (EUV) lithography for 5 nm and 3 nm. The company's current plan is to use EUV extensively for 5 nm, assuming that EUV will be ready.
The company said that it will ramp 7 nm in 2017, followed by 5 nm in 2019, to support smartphones and high-end mobile products with new features, including virtual reality and augmented reality.
Chipmakers TSMC, Samsung, and Intel are in a tight race to lead process technology development and grab profitable business from fabless customers such as Apple and Qualcomm.
For now, the world?s leading chipmakers are aiming for the lead in 10 nm.
In the third quarter this year, TSMC transferred 10nm development from R&D to production and has five tape outs lined up for mobile products. The first commercial shipments of 10nm products are scheduled for the first quarter next year. The company predicted that high-end smartphones will move to 10 nm from 16 nm during 2017.
Samsung aims to ship before the end of the year SoCs made in a 10nm FinFET process, beating rivals such as Intel and TSMC. Intel, earlier this year, said that its 10nm process could outperform other foundries and will be used to make ARM-based mobile chips for companies including LG Electronics.