Taiwanese semiconductor company TSMC will more than triple a previously planned $12 billion investment toward new facilities in Arizona as the global computer chip supply chain remains the focus of worldwide concern.
The $40 billion commitment represents one of the largest foreign direct investments in American history, as well as the largest in the history of the Grand Canyon State. One fabrication plant configured to produce N4 processors will open in 2024, while a second plant will begin manufacturing 3-nanometer processors in 2026.
“When complete, TSMC Arizona aims to be the greenest semiconductor manufacturing facility in the United States producing the most advanced semiconductor process technology in the country, enabling next generation high-performance and low-power computing products for years to come,” TSMC Chairman Mark Liu said in a press release. “We are thankful for the continual collaboration that has brought us here and are pleased to work with our partners in the United States to serve as a base for semiconductor innovation.”
The facilities will create 10,000 technology jobs and will manufacture over 600,000 wafers per year, constituting more than $40 billion in annual end-product value. More than 10,000 workers were hired to build the facilities so far.
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Multiple manufacturing economies in Asia enforced harsh lockdown measures two years ago, creating bottlenecks in the global semiconductor supply chain that persist to the present day. The CHIPS and Science Act, signed by President Joe Biden earlier this year, provides $39 billion in manufacturing incentives for semiconductors, as well as $13.2 billion for research and development and a 25% investment tax credit for computer chip production.
“It means more workers in these major 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 on Monday. “It means economic opportunity for communities that have often been left behind in economic cycles, including traditional energy communities that have powered our nation for generations and tribal nations.”
After Congress greenlit the CHIPS and Science Act, Micron announced a $40 billion memory chip project, while Qualcomm and GlobalFoundries announced a $4.2 billion fabrication partnership. Several companies, including TSMC, issued “public warnings” early in the summer vowing to “scale back their plans to make semiconductors” in the United States since the new incentives had not yet been approved, according to a report from the Department of Commerce. Member states of the European Union have also advanced legislation to encourage domestic semiconductor production.
China, South Korea, and Japan maintain nearly 80% of global semiconductor manufacturing capacity, according to data from the Brookings Institution, with Taiwanese companies like TSMC producing over 90% of cutting-edge chips smaller than 10 nanometers, the class of chips used in cell phones and computers.
TSMC has garnered particular attention as China postures an invasion of Taiwan, constituting one of the motivations for Western countries to advance semiconductor incentives. During a recent twice-per-decade meeting of top Chinese Communist Party legislative officials, Chinese President Xi Jinping opened with a discussion of his geopolitical ambitions, including the defeat of democratic aspirations in Hong Kong and the imminent conquest of the island nation.