The US government plans to provide $6.6 billion to Taiwan Semiconductor Manufacturing Company (TSMC) in order to build three semiconductor chip factories in Arizona. This move is part of President Joe Biden’s initiative to secure the supply of advanced chips in the United States. Biden highlighted the importance of this investment in light of the country’s decreased production capacity for semiconductor chips over the years, which poses economic and national security risks.
TSMC, which is the largest manufacturer of semiconductor chips globally, announced its plans to build three fabrication plants in Arizona, in addition to the two US plants it had previously planned. The total investment by TSMC in Arizona will exceed $65 billion, making it the largest foreign direct investment in the state’s history. This investment is expected to create approximately 6,000 high-wage tech jobs and more than 20,000 indirect jobs, such as in construction. The first fab is set to start production in the first half of 2025, providing domestic access to advanced chips for various technology companies.
The US government has recognized the importance of bringing more chip production onshore to mitigate potential supply disruptions, as seen during the coronavirus pandemic when chip deliveries were delayed globally. The decision to invest in domestic chip production is also a response to concerns about Taiwan’s vulnerability due to US-China trade tensions and the threat of military aggression from Beijing. The recent powerful earthquake in Taiwan has further highlighted the risks faced by the island’s chip-making industry. The goal of the investment is to strengthen the domestic supply chain resilience and reduce dependence on foreign sources.
This investment by TSMC in Arizona is seen as unprecedented by the company’s Chairman Mark Liu, given its significance in bolstering the US supply of the most advanced semiconductor chips. The initiative is expected to benefit TSMC’s US customers, which include leading technology companies, by providing a domestic supply of chips that power various products ranging from smartphones to artificial intelligence systems. The move is aligned with President Biden’s focus on enhancing the country’s chip production capabilities and reducing vulnerabilities in the supply chain.
Overall, the investment by TSMC in Arizona represents a significant step towards creating a more secure and resilient semiconductor chip supply chain in the United States. The three fabrication plants set to be built will contribute to job creation and economic growth in Arizona, while also enabling domestic access to advanced chips for various technology companies. This initiative aims to address the risks associated with global supply chain disruptions and strengthen the country’s semiconductor industry in the face of geopolitical challenges and natural disasters. President Biden and the US government are committed to advancing the US semiconductor chip manufacturing capabilities to ensure national security and economic stability.
