TSMC increases its investment in Arizona chip manufacturing to $40 billion ahead of Biden’s visit

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CNN affairs

Taiwan Semiconductor Manufacturing Company is increasing its investment in the United States, announcing on Tuesday that it will build a second semiconductor manufacturing plant in Arizona and increase its investment there from $12 billion to $40 billion.

TSMCs The plans come as tensions rise between Washington and Beijing over chips, with President Joe Biden imposing a sweeping set of controls on the sale of advanced chips and chip-making equipment to Chinese companies.

Biden visited the manufacturer’s Phoenix site and spoke of bringing jobs and investment to Arizona, calling TSMC’s $40 billion commitment “the largest foreign investment in the history of this state.” Other legislators and business leaders also attended the event, including Apple CEO Tim Cook.

“US manufacturing is back, folks,” Biden said at the event. “These are the most advanced semiconductor chips in the world, chips that will power iPhones and MacBooks, as Tim Cook can confirm… It could be a game changer.”

In his remarks, Cook said, “As many of you know, we’re working with TSMC to manufacture the chips that power our products around the world, and we look forward to expanding this work over the coming years as TSMC new and deeper roots in America.” He added that with the opening of the new facility, Apple’s own Silicon chips “can proudly bear the ‘Made in America’ stamp.”

TSMC previously announced it was 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 will be produced annually, 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 knowledge required, meaning that much of the production is concentrated at 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 visits communities where companies like 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, high-paying construction jobs, opportunities for small and medium-sized manufacturers and suppliers,” Brian Deese, director of the National Economic Council, said Monday in a call to reporters. . “It means economic opportunity for communities that have often been left behind in economic cycles, including traditional energy communities that have powered our land for generations and tribal nations.”

The global chip shortage first appeared at the beginning of the pandemic, that disrupted supply chains and changed consumer shopping patterns. Automakers reduced orders for chips, while technology companies, whose products were boosted by life in lockdown, picked up as many as possible.

The facility that Biden will visit in Phoenix on Tuesday is expected to begin chip production in 2024. The new facility should begin production in 2026.

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

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