TSMC ups its Arizona chip investment to $40B

“This is an incredibly significant moment.”

Those were the words of Apple CEO Tim Cook yesterday as he joined President Biden in announcing a critical win for US manufacturing.

The win: chip maker Taiwan Semiconductor Manufacturing Company is upping its US investment in Arizona from one $12B plant to $40B across two plants.

What’s the big deal?

We wrote about the Taiwan chip problem back in October. In short, the world has put all of its eggs in one basket.

• TSMC is responsible for 92% of global advanced semiconductor production, and its chips are critical components in iPhones, military equipment, cars — you name it. If China were to ever invade Taiwan… Well, you get the idea.

The Trump administration first pushed TSMC to break ground on a $12B fab in Arizona. This year, the Biden administration doubled down on these efforts with the $53B incentive-filled CHIPS and Science Act, and now this.

Are the new plants enough?

The fabs will produce 600k wafers per year, enough to meet US demand. Still, the move raises some questions.

• It costs at least 50% more to make these chips in the US. How much of that will be passed down to consumers?
• Will this impact Taiwan’s “Silicon shield,” the protection it gets by providing the US such a critical resource?

For now, let’s just marvel at the fact that we may soon be able to look at the back of an Apple product and read, “Designed in California. Made in the USA. Partially.”