Currently, US semiconductors represent only a measly 10% of global production. Most chips are produced in Asia, particularly South Korea and Taiwan, and the Biden administration has pushed the Chips and Science Act to boost domestic development and production.
The CHIPS Act earmarks $52 billion to reverse a decades-long trend of moving U.S. production overseas to low-cost labor regions. There was evidence that some of this production was being relocated, according to a WSJ report, revealing that Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, is laying the groundwork for a second US factory in Arizona.
People familiar with the plans told the WSJ that TSMC will soon announce one of the most advanced semiconductor factories just north of Phoenix, Ariz., alongside another of its chip factories. They said the investment in the new factory could be more than $12 billion, similar to what was committed in 2020 to build the factory next door.
TSMC is making a big bet on reviving US semiconductor production after rising US-China tensions led Washington to pass the CHIPS Act to boost domestic semiconductor manufacturing.
“TSMC’s new factory would make so-called 3-nanometer transistors, some of the smallest and lightning-fastest currently possible,” the people said.
In a statement to the WSJ on Wednesday, TSMC confirmed it was constructing a building to “potentially” house a second chip factory at its site in Arizona. The release said it would add more advanced chip capability to it, although a final decision has yet to be announced.
The Biden administration’s move to rebuild U.S. semiconductor production comes after a massive chip shortage in Asia has caused supply chain problems for auto, electronics and computer makers. defense systems. The expansion means relocating supply chains from China and neighboring countries will ensure wartime secure chip production.
TSMC, whose production plants are based primarily in Taiwan, has begun to diversify over the past year due to threats of invasion from China.
In August, TSMC Chairman Mark Liu told CNN that if China invaded Taiwan and seized the world’s most advanced chip factories, it would cause devastating supply chain disruptions worldwide. .
In addition to national initiatives, the Biden administration has slapped China with export restrictions on advanced chips and held back the sale of chip-making equipment. The restrictions attempt to slow progress in China while giving the United States time to rebuild its chip production base.
Intel Corp. and memory maker Micron Technology Inc. are also investing in new chip factories in the United States as global supply chains are reorganized due to national security threats.
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