President Joe Biden is going all the way to Arizona to welcome a major Asian chipmaker—and perhaps to persuade them to make more in America.
Biden will visit TSMC’s upcoming Arizona factory on Dec. 6, the White House said, to attend its “tool-in ceremony”: the installation of the first batch of equipment on the shop floor. It’s a landmark moment for TSMC, the world’s biggest semiconductor chipmaker, but an even bigger moment for Biden, whose polices have lured TSMC to open its first advanced chip plant in the US.
After the pandemic and subsequent supply chain disruptions caused a worldwide shortage of chips, Biden has pushed to bolster chip manufacturing in America. In August, he earmarked $52.7 billion for semiconductor manufacturing and research, the bulk of which—$39 billion—went into incentives for domestic manufacturing. The legislation also provides a 25% investment tax credit for capital expenses and equipment.
The US needed the push. Until last year, the country produced a low 12% of the world’s chips. And if any firm has the know-how to give the industry a boost, it’s the 35-year-old TSMC.
$12 billion: The cost of TSMC’s upcoming plant in Phoenix, Arizona
1,218: The number of acres of land that TSMC bought for its factory
$89 million: The cost of TSMC’s Arizona land
2021: The year TSMC began construction on its Arizona plant
2024: The year TSMC expects to start mass production in Arizona
20,000: The number of silicon chip wafers that the new factory is expected to make each month, less than 1.6% of the 1.3 million TSMC currently produces
6: The number of factories TSMC plans to build in Arizona over the next 10-15 years
Taiwan makes more than 90% of the world’s chips. But the threat of an impending invasion by China imperils its dominant position. Any disruption to the Taiwanese industry would derail global production of just about everything, from home appliances to automobiles to fighter jets.
In the event of political turmoil, no company is immune. Just look at how unrest at Foxconn’s factories over China’s zero-covid policy affected nearly a third of Apple’s iPhone supplies. That’s why even a juggernaut like TSMC is trying to diversify geographically.
Aside from the US, TSMC is also building a plant in Japan. It is the first and largest beneficiary of a 617 billion yen ($4.6 billion) fund that the Japanese government has set up to boost domestic chip manufacturing.
Of course, reaching the scale of manufacturing already under way in Taiwan will take years. Wang Mei-hua, Taiwan’s economy minister, said that most chips would still be made in Taiwan despite the US and Japanese plants, Reuters reported.
TSMC has been a major supplier for Apple for years. That’s why, alongside Biden, Tim Cook, Apple’s CEO, is expected to attend TSMC’s ceremony on Dec. 6.
When the plant is up-and-running, Apple, which actively lobbied for plant subsidies, is expected to buy up a third of the output. But a Bloomberg report suggests these promises are more for optics and PR than anything. By the time TSMC starts producing 3- and 4-nanometer chips at scale in the US, Apple will have moved on to 2 nm—the more sophisticated chips that can still be sourced only from Taiwan.