Taiwan's TSMC Announces $12B High Tech Factory in Arizona After Trump Call for U.S. Chip Manufacturing

Taiwanese tech giant TSMC has unveiled plans to build a $12 billion factory in Arizona to produce high tech chips, announcing the move just days after President Donald Trump and chipmakers partnered in a drive to build more chip manufacturing in America.

Reuters reports that the Taiwanese firm Taiwan Semiconductor Manufacturing Co (TSMC), the largest contract chipmaker in the world, plans to build a $12 billion factory in Arizona in what appears to be a win for the Trump administration’s attempts to bring more global tech supply chains to the United States.

The factory will reportedly create over 1,600 jobs and comes as President Trump has criticized China’s trade practices and Beijing’s handling of the Wuhan coronavirus. U.S. Secretary of Commerce Wilbur Ross stated that the deal was “another indication that President Trump’s policy agenda has led to a renaissance in American manufacturing.”

TSMC commented: “This project is of critical, strategic importance to a vibrant and competitive U.S. semiconductor ecosystem that enables leading U.S. companies to fabricate their cutting-edge semiconductor products within the United States.”

TSMC stated that the plan was to build the plant over nine years. Bernstein analysts said in a note: “The budget… suggests the eventual scale won’t be big,” adding that revenue contribution from the plant will stay at around 3-4 percent. “The scale and technology is similar to what TSMC did in China, suggesting a balance between the US & China,” Bernstein analysts said.

JP Morgan analysts said in a note: “While it is hard to be certain, we believe that TSMC announcing a U.S. Fab could remove the threat of further Huawei restrictions in the very near-term at least.”

TSMC stated that the construction of the Arizona facility would begin in 2021 with production at the facility expected to begin in 2024 and would be able to process up to 20,000 silicon wafers per month. Each wafer contains thousands of individual chips, the investment will be made from 2021 to 2029.