China tensions underline US investment in TSMC – TechCrunch
Comment
The United States Department of Commerce Monday proposed investing as much as $6.6 billion to fund a third Taiwan Semiconductor Manufacturing Company Limited (TSMC) fab in Arizona. The funding would arrive by way of the CHIPS and Science Act, in a bid to foster more domestic semiconductor production.
The move represents a broader push to bring more manufacturing to the U.S., but unspoken in the fanfare around today’s announcement is the potential escalation of tensions with China.
The proposed fab is a greenfield facility — meaning it’s custom-built from the ground up. It would focus on 2nm (“or newer”) architectures, designed for a slew of different applications, including computing, 5G/6G wireless communications and, of course, AI. TSMC Arizona — the subsidiary behind the proposed construction — has stated that it will build the facility before the end of the decade.
The chipmaker says construction will bring more than 20,000 jobs to the area, while forecasting around 6,000 manufacturing roles once the facility is operational.
US to award TSMC $6.6B in grants, $5B in loans to step up chip manufacturing in Arizona
Localized manufacturing has been a key focus for the Biden administration, as the COVID-19 pandemic highlighted vulnerabilities in the global supply chain. Those issues have been exacerbated by the ubiquity of silicon in our daily lives. Those numbers are only growing. According to a semiconductor trade association, global sales hit $47.6 billion in January 2024 — marking more than a 15% increase over the prior year.
“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,” President Biden said in a release tied to the news.
Much of the administration’s funding has focused on U.S. firms like Intel, which was targeted with its own $8.5 billion proposal toward the end of March. TSMC, however, is an 800-pound gorilla, both in terms of market share and technological advances. The firm has, however, found itself in the middle of looming geopolitical concerns. The United States and allies would be at a massive disadvantage should China seize control of Taiwan and its manufacturing capabilities.
TSMC has its own concerns over such a scenario. For one thing, the company’s two biggest customers — Apple and Nvidia — are American. For another, some in the U.S. have even gone so far as suggesting the country bomb chipmakers, should such things come to pass.
“We should make it very clear to the Chinese, if you invade Taiwan, we will blow up TSMC,” Massachusetts Congressman Seth Moulton said at an event back in May.
The Democratic representative has since distanced himself from the clip, stating that it was selectively edited by the Chinese Communist Party. However, he is hardly alone in floating such suggestions. Earlier the same year, former Trump National Security Advisor Robert O’Brien stated, “The United States and its allies are never going to let those factories fall into Chinese hands,” suggesting the country destroy the factories. O’Brien went so far as comparing such hypothetical actions to Britain’s actions during the Second World War.
Such saber rattling has drawn international criticism. Beyond the clear ethical questions, such an evasive action would have a massive impact on the global economy. In addition to Apple and Nvidia, TSMC also serves Sony, MediaTek, AMD, Qualcomm and Broadcom, among others.
For all the money the United States government continues to invest, Intel is simply playing catch-up to TSMC’s multiyear technological head start. TSMC makes around 90% of the world’s most advanced chips. For now, the best defense the U.S. has against future disruptions — be they pandemics or geopolitical conflicts — is diversification of supply. That applies to where and by whom components are manufactured.
While the architects of the CHIPS and Science Act would no doubt love to elevate U.S. companies manufacturing domestically, ours is a global economy. TSMC is certainly aware of the value of distributing the supply chain.
“The proposed funding from the CHIPS and Science Act would provide TSMC the opportunity to make this unprecedented investment and to offer our foundry service of the most advanced manufacturing technologies in the United States,” the chip giant’s chairman Mark Liu said in a release tied to the news. “Our U.S. operations allow us to better support our U.S. customers, which include several of the world’s leading technology companies. Our U.S. operations will also expand our capability to trailblaze future advancements in semiconductor technology.”
Among those who monitor U.S.-China relations, the upcoming presidential election could mark a key turning point. Former President Trump dramatically escalated trade tensions, for one. Huawei’s addition to the entity list marked a massive setback for the mobile firm, as it lost access to key components from American companies like Google and Qualcomm.
Speaking last year, Biden’s now-former U.S. Director of National Intelligence Avril Haines noted that if a U.S. invasion halts TSMC’s Taiwan-based product, “it will have an enormous global financial impact that I think runs somewhere between $600 billion to $1 trillion on an annual basis for the first few years.”
Every weekday and Sunday, you can get the best of TechCrunch’s coverage.
Startups are the core of TechCrunch, so get our best coverage delivered weekly.
The latest Fintech news and analysis, delivered every Tuesday.
TechCrunch Mobility is your destination for transportation news and insight.
By submitting your email, you agree to our Terms and Privacy Notice.
William A. Anders, the astronaut behind perhaps the single most iconic photo of our planet, has died at the age of 90. On Friday morning, Anders was piloting a small…
You’re running out of time to join the Startup Battlefield 200, our curated showcase of top startups from around the world and across multiple industries. This elite cohort — 200…
New York’s state legislature has passed a bill that would prohibit social media companies from showing so-called “addictive feeds” to children under 18, unless they obtain parental consent. The Stop…
Dogs are the most popular pet in the U.S.: 65.1 million households have one, according to the American Pet Products Association. But while cats are not far off, with 46.5…
Anterior, a company that uses AI to expedite health insurance approval for medical procedures, has raised a $20 million Series A round at a $95 million post-money valuation led by…
Welcome back to TechCrunch’s Week in Review — TechCrunch’s newsletter recapping the week’s biggest news. Want it in your inbox every Saturday? Sign up here. There’s more bad news for…
If death and taxes are inevitable, why are companies so prepared for taxes, but not for death? “I lost both of my parents in college, and it didn’t initially spark…
Google and Microsoft have made their developer conferences a showcase of their generative AI chops, and now all eyes are on next week’s Worldwide Developers Conference, which is expected to…
AI systems and large language models need to be trained on massive amounts of data to be accurate but they shouldn’t train on data that they don’t have the rights…
Before Wazer came along, “water jet cutting” and “affordable” didn’t belong in the same sentence. That changed in 2016, when the company launched the world’s first desktop water jet cutter,…
Former Autonomy chief executive Mike Lynch issued a statement Thursday following his acquittal of criminal charges, ending a 13-year legal battle with Hewlett-Packard that became one of Silicon Valley’s biggest…
Featured Article
As another Snowflake customer confirms a data breach, the cloud data company says its position “remains unchanged.”
Investor demand has been so strong for Rippling’s shares that it is letting former employees particpate in its tender offer. With one exception.
It turns out the space industry has a lot of ideas on how to improve NASA’s $11 billion, 15-year plan to collect and return samples from Mars. Seven of these…
Featured Article
When Bowery Capital general partner Loren Straub started talking to a startup from the latest Y Combinator accelerator batch a few months ago, she thought it was strange that the company didn’t have a lead investor for the round it was raising. Even stranger, the founders didn’t seem to be…
The keynote will be focused on Apple’s software offerings and the developers that power them, including the latest versions of iOS, iPadOS, macOS, tvOS, visionOS and watchOS.
Welcome to Startups Weekly — Haje’s weekly recap of everything you can’t miss from the world of startups. Anna will be covering for him this week. Sign up here to…
HSBC and BlackRock estimate that the Indian edtech giant Byju’s, once valued at $22 billion, is now worth nothing.
Apple is set to board the runaway locomotive that is generative AI at next week’s World Wide Developer Conference. Reports thus far have pointed to a partnership with OpenAI that…
LinkedIn has confirmed it will no longer allow advertisers to target users based on data gleaned from their participation in LinkedIn Groups. The move comes more than three months after…
Founders: Need plans this weekend? What better way to spend your time than applying to this year’s Startup Battlefield 200 at TechCrunch Disrupt. With Monday’s deadline looming, this is a…
The company is in the process of building a gigawatt-scale factory in Kentucky to produce its nickel-hydrogen batteries.
Meta is quietly rolling out a new “Communities” feature on Messenger, the company confirmed to TechCrunch. The feature is designed to help organizations, schools and other private groups communicate in…
Featured Article
Voice assistants in general are having an existential moment, and generative AI is poised to be the logical successor.
Education software provider PowerSchool is being taken private by investment firm Bain Capital in a $5.6 billion deal.
Shopify has acquired Threads.com, the Sequoia-backed Slack alternative, Threads said on its website. The companies didn’t disclose the terms of the deal but said that the Threads.com team will join…
Featured Article
Two senior police officials in Bangladesh are accused of collecting and selling citizens’ personal information to criminals on Telegram.
Carta, a once-high-flying Silicon Valley startup that loudly backed away from one of its businesses earlier this year, is working on a secondary sale that would value the company at…
Boeing’s Starliner spacecraft has successfully delivered two astronauts to the International Space Station, a key milestone in the aerospace giant’s quest to certify the capsule for regular crewed missions. Starliner…
Rivian needs to sell its new revamped vehicles at a profit in order to sustain itself long enough to get to the cheaper mass market R2 SUV on the road.
Powered by WordPress VIP