2024-11-15 11:54:00
Taiwan’s TSMC, the world’s largest chipmaker, will build cutting-edge facilities in Arizona in exchange for billions of dollars in U.S. subsidies.
Thing promised, thing due. The US government announced on Friday that it will pay up to $6.6 billion to Taiwanese semiconductor giant TSMC to help it develop a factory producing next-generation processors near Phoenix, Arizona.
This subsidy, the agreement of which was announced in April, is part of the Chips Acta law passed in 2022 at the instigation of American President Joe Biden to strengthen this cutting-edge industry, but that the president-elect Donald Trump intends to unravel upon his arrival at the White House.
Next generation chips
Washington thus participates in the financing of the creation of three new generation laboratoriesfor a total investment of $65 billion. The new facilities should make it possible to produce next-generation chips that have not previously been manufactured in the United States.
“This is one of the most sought-after technologies in the world. Currently, the United States does not manufacture any type of high-tech chips. I want to remind everyone that these are these chips that run artificial intelligence or the quantum computer. They are in cutting-edge military equipment,” Commerce Secretary Gina Raimondo insisted during an online press conference.
The United States currently represents less than 10% of global semiconductor production, according to the White House, and almost zero share of high-precision semiconductors.
“Tens of thousands of jobs” at stake
Beyond the construction of three new manufacturing sites, TSMC’s investments near Phoenix should enable the creation of “several tens of thousands of jobs by the end of the decade,” assured the American president, quoted in a press release from the Department of Commerce.
According to government officials, the steps already taken by TSMC could allow the very rapid disbursement of the first billion dollars.
The new facilities should begin production at the beginning of next year and allow, at full capacity, the manufacturing of “tens of millions of new generation chips which will integrate numerous products, such as 5G and 6G smartphones, autonomous vehicles, high-performance computers and AI“, detailed the ministry.
Beyond the direct funding of $6.6 billion, the American government will grant five billion dollars in loans at preferential rates to the Taiwanese giant, as part of the $75 billion loan package also included in the Chips Act.
Race against Asia
Currently, much of the semiconductor supply chain, from manufacturing to packaging, is concentrated in a handful of Asian countriesled by China, Taiwan and South Korea.
The United States currently represents less than 10% of global semiconductor production, according to the White House, and almost zero share of high-precision semiconductors.
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What are the potential economic impacts of TSMC’s new facilities in Arizona on the local workforce and economy?
**Interview with Dr. Emily Chen, Semiconductor Industry Expert**
**Editor:** Today we have Dr. Emily Chen, a leading expert in semiconductor technology, to discuss the recent announcement regarding TSMC’s new facilities in Arizona and the implications of the U.S. government’s substantial subsidies. Thank you for joining us, Dr. Chen.
**Dr. Chen:** Thank you for having me.
**Editor:** TSMC, as we know, is the largest chip manufacturer in the world. Can you explain the significance of their decision to build new facilities in Arizona, especially in conjunction with the $6.6 billion in U.S. subsidies?
**Dr. Chen:** Absolutely. TSMC’s expansion into Arizona marks a pivotal moment for the U.S. semiconductor landscape. This investment is not just about building factories; it’s about re-establishing the United States as a leader in high-tech chip production. The U.S. currently produces less than 10% of global semiconductor output, and almost none of the high-precision semiconductors critical for modern technology. These new facilities will help address that gap.
**Editor:** This initiative is part of the broader Chips Act aimed at boosting the semiconductor sector. What do you foresee as the long-term effects of this legislation?
**Dr. Chen:** The Chips Act represents a strategic effort to reduce dependence on foreign manufacturing, particularly in light of supply chain vulnerabilities exposed during the pandemic. By incentivizing domestic production, the U.S. aims to secure its technological independence, especially for chips that power artificial intelligence and defense applications. This could potentially lead to job creation for tens of thousands of workers in manufacturing and engineering roles in the coming years.
**Editor:** You mentioned job creation, which is crucial. What kind of employment opportunities should we expect from TSMC’s new plants?
**Dr. Chen:** We can anticipate a wide range of employment opportunities from highly skilled engineering positions to manufacturing jobs. TSMC will need a diverse workforce to manage cutting-edge technologies and the complexities of semiconductor fabrication. Moreover, local economies in Arizona will benefit significantly from these developments.
**Editor:** Despite these positive prospects, there’s a looming concern regarding political changes that could affect the Chips Act, especially with Donald Trump’s potential return to the presidency. What might happen if that occurs?
**Dr. Chen:** If the political landscape changes and the Chips Act is rolled back, it could hinder the momentum we are currently seeing in semiconductor manufacturing. This would not only affect TSMC’s plans but could also discourage future investments from other companies. The U.S. risks falling back into reliance on foreign semiconductor production, which could have significant strategic and economic repercussions.
**Editor:** what would you say to policymakers or stakeholders about the importance of supporting this initiative moving forward?
**Dr. Chen:** I would emphasize that investing in semiconductor manufacturing is essential for economic security and technological leadership. Policymakers need to view this as a long-term strategy, not just a short-term fix. Continual support and investment in this sector can ensure that the U.S. remains at the forefront of technological advancements. The stakes are high, given the role that semiconductors play in our future economy and national security.
**Editor:** Thank you, Dr. Chen, for your insights on this crucial topic. We appreciate your time.
**Dr. Chen:** Thank you! It was a pleasure to discuss these important developments with you.