The Taiwan Semiconductor Manufacturing Company (TSMC) announced Tuesday that it was constructing a second manufacturing facility in Arizona, bringing its total investment in the state to roughly $40 billion, ahead of a visit to the facilities by President Joe Biden.
TSMC anticipates that the first of the facilities, known as fabs, will be operational in 2024, while the second will be operational in 2026, at which point the two will generate more than $40 billion per year in chips. Biden, whose signature Chips and Science Act allocates just over $50 billion to subsidize American chip manufacturing, is expected to tout both the law and American manufacturing in a speech at the facility Tuesday afternoon, according to The Financial Times. (RELATED: Here’s Why November’s Seemingly Positive Jobs Numbers Are Actually A Massive Red Flag)
Arizona is committed to a long-term, mutually beneficial relationship with TSMC. Great to meet again with the semiconductor giant’s chairman, Dr. Mark Liu. Arizona is proud to be home to TSMC’s high-tech chip manufacturing operations! pic.twitter.com/Rl58vYoL8E
— Doug Ducey (@DougDucey) December 5, 2022
The new facility will produce chips that are 3 nanometers wide, also known as N3 chips, technology that is currently cutting-edge but is expected to be one generation behind the N2 chips that will be under construction in Taiwan by 2026, according to FT. TSMC is likely to continue keeping its U.S.-based factories one technological generation behind Taiwan, a source familiar with the matter told FT.
Patrick Chen, the head of research in Taiwan for capital markets firm CLSA, noted that U.S.-made chips could account for roughly 15% of the company’s output once the Arizona fabs hit maximum productivity, according to FT. However, the company is unlikely to produce its most advanced chips in the States, a process which would “significantly inflate cost,” Chen said.
TSMC did not immediately respond to a Daily Caller News Foundation request for comment.
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