TSMC boosts its Arizona chipmaking investment to $40 billion ahead of Biden’s visit

New York
CNN Business

Taiwan Semiconductor Manufacturing Company is increasing its investment in the United States, announcing on Tuesday that it is building a second semiconductor factory in Arizona and increasing its investment there from $1[ads1]2 billion to $40 billion. The move marks one of the “largest foreign direct investments in US history,” according to the company.

TSMC’s plans come as tensions between Washington and Beijing rise over chips, with President Joe Biden imposing a sweeping set of controls on the sale of advanced chips and chipmaking equipment to Chinese firms.

Biden visited the manufacturer’s site in Phoenix and talked about bringing jobs and investment to the state. Other lawmakers and business leaders also attended the event, including Apple CEO Tim Cook.

“As many of you know, we work with TSMC to manufacture the chips that help power our products around the world, and we look forward to expanding this work in the coming years as TSMC forms new and deeper roots in America,” Cook said at the event, adding that with the opening of the new facility, Apple’s own silicon chips “can proudly be labeled ‘Made in America’.”

TSMC has previously announced that it is building a $12 billion facility in Arizona that will eventually produce 3-nanometer chips, TSMC’s most advanced technology. Between the two factories, thousands of “high-paying high-tech jobs” will be added to the state and 600,000 wafers per year will be produced, the company said.

TSMC accounts for an estimated 90% of the world’s super-advanced computer chips, supplying tech giants including Apple ( AAPL ) and Qualcomm ( QCOM ).

Chips are an indispensable part of everything from smartphones to washing machines – but are also difficult to make due to the high development costs and level of know-how required, meaning much of the production is concentrated among a handful of suppliers.

The White House touts the new investments as a direct result of Biden’s economic plan, including the $200 billion CHIPS and Science Act. Biden has visited communities where companies such as TSMC and Intel have announced new investments since the law was passed this summer.

“It means more workers in these big factories, but it also means more opportunities for suppliers and contractors, good-paying construction jobs, opportunities for small and medium-sized manufacturers and suppliers,” National Economic Council Director Brian Deese told reporters in a telephone call Monday. . “That means economic opportunity for communities that have often been left behind in economic cycles, including traditional energy communities that have fueled our nation for generations and tribal nations.”

The global chip shortage first appeared at the beginning of the pandemic, which changed supply chains and changed consumer shopping patterns. Automakers cut back on their orders for chips while technology companies, whose products were boosted by lockdown living, snapped up as many as they could.

The facility Biden will visit Tuesday in Phoenix is ​​scheduled to begin producing chips in 2024. The new facility is scheduled to begin production in 2026.

— CNN’s Nikki Carvajal, Wayne Chang and Diksha Madhok contributed to this report.

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