USA: New Plant to Produce Advanced Microchips

Natural disasters, such as the recent devastating earthquake, as well as growing tensions with China, are forcing Taiwanese manufacturers to seek new, safe territories to relocate their production. Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest microchip maker, has announced that it will build a second plant in the US state of Arizona. It will produce particularly advanced microchips, which are also in high demand for the development of artificial intelligence systems.

The USA seeks to reduce industrial dependence on China and has said it will “contribute to the construction of the innovative plant with $6.6 billion in grants and another $5 billion in subsidized loans.” The investment is part of the so-called Chip Act. With its help, President Joe Biden’s administration intends to distance itself from China and significantly increase US capacity to produce microchips and other critical electronic components.

The new plant, which is expected to be operational in 2028, will be the second to be built by Taiwan’s TSMC on American soil. The project for the first plant – also in Arizona – was unveiled in 2020, under President Donald Trump’s administration. Construction work is now in full swing there. It is expected to begin production in 2025. The United States has listed microchip production as a critical national security issue, and on April 8, TSMC announced that it “will also build a third plant to begin production in 2030.”