President Biden delivered remarks at TSMC Semiconductor plant and celebrated Taiwan Semiconductor Manufacturing Co.’s plans to increase its investments in Arizona to $40 billion and construct a second factory, with companies like Apple Inc. eager to source more chips from the US.
Biden joined Tim Cook to hail TSMC’s $40 billion US chip venture. He discussed how his economic plan was leading to a manufacturing boom, rebuilding supply chains, and creating good-paying jobs in Arizona and across the country.
“These are the most advanced semiconductor chips on the planet. The chips will power iPhones and MacBooks,” Biden said during a visit to a $12 billion plant TSMC is already building in Phoenix. “Apple had to buy all the advanced chips from overseas.
Chip giant Taiwan Semiconductor Manufacturing Co.'s decision to triple its investment in Arizona is part of a national rush to re-shore key inputs for the American economy.
At the same time, there is a sober reflection on the industry as supply chains bifurcate in the East and West. TSMC founder says 'globalization is almost dead' as Asian foundry giant expands in US
It's one of the blunter statements offered in the semiconductor industry lately. For it to come from the founder of the world's most advanced, and second-largest, chip manufacturer, which makes silicon designed by major Western firms like Qualcomm and Nvidia, is a sober reflection on the industry's state of affairs as US chip sanctions against China create a bifurcation of supply chains.
TSMC says the plants will create more than 10,000 high-paying tech jobs, including 4,500 directly at the plants themselves.
"American manufacturing is back, folks," President Biden said, speaking at the TSMC facility.
The big picture: The last few years of economic disarray — broken global supply chains, high inflation, Russia's war on Ukraine, and growing trade and technology tensions with China — upended the system of globalization that emerged after the Cold War.
Technology today is constantly evolving, enabling quicker change and advancement, altering the tractional processes involved, and necessitating ongoing skill upgrades. According to the World Economic, Forum, the adoption of new technologies will need reskilling for 50% of all workers by 2025. Since the first industrial revolution, the engineering industry has expanded significantly. In India, it now accounts for 27% of all factories in the industrial sector and 63% of all international collaborations, making it the largest industrial sector.
That global network required that people, commodities, capital and goods could — and would — always flow easily across borders.
But the onset of COVID generated a series of global government scrambles for essentials — first masks and vaccines, then semiconductors, and now oil and gas — that at times blurred the line between economic security and national security.
The disorder also highlighted the importance of developing domestic production of cutting-edge semiconductors, now sourced from a Taiwan that finds itself increasingly imperiled by an aggressive China.
The $280 billion Chips and Science Act of 2022 — signed into law in August — includes $52 billion in subsidies to coax companies into building production plants in the U.S.
Corporations have been receptive, in part because Russia's invasion of Ukraine and China's response to Speaker Nancy Pelosi's visit this year "have really hammered home the fact that there is no guarantee of peace in the Taiwan Straits going forward," says Chris Miller, a Tufts University history professor and author of the new book "Chip War: The Fight for the World's Most Critical Technology."
TSMC's announcement is just the latest in a string of high-profile investment plans from computer chip companies. In early 2022, Intel announced it would spend $20 billion on a new chip production facility near Columbus, Ohio, and has plans to spend a similar amount building out plants in Chandler, Arizona.
Samsung Electronics has floated the possibility that it could follow a previously announced $17 billion investment in chip production in Austin, Texas, with up to $200 billion on 11 plants in the area, according to Bloomberg.
The U.S. and European focus on boosting chip manufacturing, along with China's simultaneous desire to lead global tech "all point to increased semiconductor capital expenditure in the coming decade," analysts with S&P Global wrote in a recent research report.
In the aggregate, the reshuffling of the global chip market along national lines could be inefficient and costly as countries around the world rush to build, or rebuild, their own local supply of chips.
But in the U.S., it will make for good politics, offering shovel-ready photo ops for politicians at plants that promise good-paying jobs that, by definition, won't be outsourced to China.
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