Jun 2, 2021 - Technology

Taiwan chip giant starts work on Arizona plant as global shortage continues

Ina Fried
Illustration of Taipei 101 made out of computer chips.

Illustration: Aïda Amer/Axios

Chipmaker Taiwan Semiconductor Manufacturing has started work on a $12 billion semiconductor manufacturing plant in Arizona. The move is part of what's expected to be a flurry of new U.S. construction due to a global shortage, combined with the prospect of government subsidies.

Why it matters: Computer chips are seen as vital for both national security and economic prosperity. The U.S., once responsible for 36% of global output, now accounts for only a third of that.

Driving the news: TSMC announced the start of Arizona construction at a company event in Taiwan Monday, per Reuters, with CEO C.C. Wei saying that volume production from the plant will begin in 2024.

Flashback: A highly touted deal with Foxconn in the early days of the Trump administration to build a massive LCD-making operation in Wisconsin fizzled, with the company agreeing in April to create a much smaller operation there.

The big picture: A global chip shortage has made semiconductors a hot topic of conversation, but the industry remains heavily concentrated in Taiwan and Korea, especially for the most advanced chips.

  • Congress has authorized billions of dollars in funding to spur domestic chip production, but has yet to pass a bill actually providing the funds.
  • U.S. chip leader Intel has also said it wants to reinvest in its domestic manufacturing capacity, announcing a $20 billion effort to build two new plants in Arizona and $3.5 billion in new investment to expand its chipmaking operations in New Mexico.

Yes, but: Investments made now will take years to bear fruit and sustained investment will be needed to keep the U.S. competitive for the long term.

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