Chips
The new deal should help bolster American semiconductor manufacturing capacity and supply chain independence.
Image of a semiconductor from Rawpixel.
WASHINGTON April 8, 2024 —The Department of Commerce on Monday announced a deal with the Taiwan Semiconductor Manufacturing Company to build new semiconductor factories on American soil.
The new facilities will produce and manufacture what the administration called “the most advanced chips in the world,” according to the department’s press release. The new investments will place the United States in position to churn out 20 percent of the world’s semiconductors by 2030, up from 12 percent today.
The deal also includes $50 million from the CHIPS Act to train members of the local community to take jobs in the local communities of the facilities.
The deal will increase the investment of Taiwanese semiconductor giant TSMC in Arizona to $65 billion. The manufacturing plants are expected to add 25,000 new manufacturing jobs and thousands of more jobs in ancillary areas. Roughly $5 billion in loans will be made available through the CHIPS and Science Act in the form of loans.
The 2022 Chips Act approved $280 billion in funding for semiconductor research and technology. The act aims to increase American semiconductor capacity and boost supply-chain self-sufficiency. Revitalizing American supply chains became a major legislative goal following the 2021 supply chain disruptions in the midst of the coronavirus pandemic.
Moreover, the Biden Administration hopes that the new deal will help the United States strengthen its competitiveness in the semiconductor industry, reversing the precipitous decline of American semiconductor manufacturing capacity from 40 percent of global supply in 1990.
“Semiconductors – those tiny chips smaller than the tip of your finger – power everything from smartphones to cars to satellites and weapons systems,” Biden said in the statement. “TSMC’s renewed commitment to the United States, and its investment in Arizona represent a broader story for semiconductor manufacturing that’s made in America and with the strong support of America’s leading technology firms to build the products we rely on every day.”
TSMC broke ground on a new manufacturing facility in Phoenix, Arizona in 2021. The company started construction on a second facility in 2023.
