Taiwanese chipmaker TSMC announced on Tuesday that it would increase its planned investment in its new Arizona plant by more than three times, to $40 billion. This would make it one of the largest foreign investments in U.S. history, and President Joe Biden praised the project while he was there.
After problems with the supply chain slowed down the U.S. economy early in Biden’s term, the new investment is a big win for him.
Biden gave a speech in front of a new factory draped with an American flag and a big sign that said “A Future Made in America, Phoenix, AZ.” He said, “People, American manufacturing is back.”
Biden’s recent trip to Asia made him realise that the United States is in a better position to lead the world economy in the coming years “if we keep our focus,” he said.
Related: Chinese stocks went up on hopes for stimulus, and Berkshire’s stake in TSMC helped it.
Taiwan Semiconductor Manufacturing Co Ltd, or TSMC, chairman Mark Liu stated that when the two planned chip fabrication plants open, they will generate $10 billion in revenue per year.He also said that products made with chips made there would bring in $40 billion a year in sales for customers.
Apple Inc. (NASDAQ:AAPL), Nvidia Corp. (NASDAQ:NVDA), and Advanced Micro Devices Inc. (NASDAQ:AMD) are all big TSMC customers, and they all said they expected their chips to be made in the new plants.
“We work with TSMC to make the chips that power our products all over the world. “We hope to do more of this work in the coming years as TSMC establishes deeper roots in the United States,” Apple CEO Tim Cook said in a speech.
Biden was joined at the opening ceremony by Morris Chang, the founder of TSMC, Sanjay Mehrotra, the CEO of chipmaker Micron Technology Inc (NASDAQ:MU), and Jensen Huang, the CEO of Nvidia.
The plant is set to open in 2024, and it will make a more advanced chip than was first said.
After the news came out, TSMC shares listed in Taipei were flat at the start of trading on Wednesday, just like the rest of the market.
TSMC is the world’s largest contract chipmaker, and many of the biggest hardware companies in the U.S. get their chips from them. It is spending $40 billion on the two facilities, which is the most money the company has ever spent outside of Taiwan.
Huang, from Nvidia, said in prepared remarks for Tuesday’s event, “Bringing TSMC’s investment to the United States is a masterstroke and a game-changing development for the industry.”
Since the CHIPS and Science Act was passed this summer, chipmakers have been announcing one big investment after another. TSMC’s new investment in Arizona is the latest one. These include International Business Machines Corp. (NYSE:IBM), Micron Technology Inc., and Wolfspeed Inc.
TSMC said it would build a second facility nearby to make “3 nanometer” chips, which are the most advanced ones being made right now, by 2026.
TSMC also said it was going to build a plant to clean up water from factories. Chip making uses a lot of water, and Arizona, which is mostly desert, is having trouble getting enough water.
Liu from TSMC said that the Phoenix factories should create 13,000 high-tech jobs, 4,500 of which will be with TSMC and the rest with suppliers.
After the pandemic messed up the supply chain and caused shortages of chips for cars and other things, Biden has been trying to get more chips made.
A White House report on supply chain problems from last year said that the United States only makes 12% of the world’s semiconductors. This is down from 37% 20 years ago.
People worry that Taiwan is too important because it makes most of the chips used in technology like cellphones, cars, and fighter jets. This is especially true as China increases military pressure to prove its sovereignty claims.
China says that Taiwan is part of its territory, but Taiwan’s government, which was chosen by the people, doesn’t agree.
Related: According to the Nikkei, Aplpe intends to use TSMC’s latest chip technology in its iPhones and Macs.
The Chips and Science Act, which Biden signed into law in August, is meant to keep supply chain problems from coming back.
Brian Deese, director of the White House National Economic Council, said that Biden’s trip to Arizona is an important step in TSMC’s plan to bring the most advanced semiconductor manufacturing back to the U.S.
In the 2020 presidential election, Biden’s win in Arizona was a big part of how he got to the White House. In 2016, the state was won by Trump, a Republican.
Biden has said that he wants to run again in 2024 for a second four-year term.
