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TSMC triples Arizona chip plant investment, Biden hails project

Stock Markets Dec 07, 2022 12:57AM ET
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2/2 © Reuters. FILE PHOTO: U.S. President Joe Biden delivers remarks about the student loan forgiveness program from an auditorium on the White House campus in Washington, U.S., October 17, 2022. REUTERS/Leah Millis/File Photo 2/2
 
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By Steve Holland and Jane Lanhee Lee

PHOENIX, Ariz. (Reuters) - Taiwanese chipmaker TSMC on Tuesday said it would more than triple its planned investment at its new Arizona plant to $40 billion, among the largest foreign investments in U.S. history, as President Joe Biden visited and hailed the project.

The expanded investment is a big win for Biden after supply chain issues disrupted the U.S. economy early in his presidency.

"American manufacturing is back, folks," Biden said in a speech against the backdrop of the new factory draped with an American flag and a large banner reading "A Future Made in America Phoenix, AZ."

Biden's recent trip to Asia convinced him the United States is in a better position to lead the world economy in the years ahead "if we keep our focus," he said.

Mark Liu, chairman of Taiwan Semiconductor Manufacturing Co Ltd, known as TSMC, estimated annual revenue of $10 billion when the two planned chip fabrication plants open, adding that customers would have annual sales of $40 billion from products using chips made there.

Apple Inc (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA) Corp and Advanced Micro Devices (NASDAQ:AMD) Inc, all major TSMC customers, said they expected their chips to be made in the new plants.

"We work with TSMC to manufacture the chips that help power our products all over the world. And we look forward to expanding this work in the years to come as TSMC forms new and deeper roots in America," Apple CEO Tim Cook said in a speech.

Also joining Biden at the facility's opening ceremony was TSMC founder Morris Chang, chipmaker Micron Technology Inc (NASDAQ:MU) CEO Sanjay Mehrotra and Nvidia CEO Jensen Huang, among others.

The plant, scheduled to be operational in 2024, will make a more advanced chip than initially announced.

TSMC's Taipei-listed shares were flat in early trade on Wednesday following the announcement, tracking the broader market.

TSMC, the world's largest contract chipmaker, is a leading supplier to major U.S. hardware manufacturers. Its $40 billion funding for the two facilities is the company's largest investment outside of Taiwan.

"Bringing TSMC's investment to the United States is a masterstroke and a game-changing development for the industry," Nvidia's Huang said in remarks prepared for Tuesday's event.

TSMC's expanded investment in Arizona is the latest in a string of major investments announced by chipmakers since the CHIPS and Science Act passed this summer. These include International Business Machines (NYSE:IBM) Corp, Micron Technology Inc and Wolfspeed Inc.

TSMC said it would build a second facility nearby to produce so-called "3 nanometer" chips by 2026, the most advanced currently in production.

TSMC also said it was planning to build an industrial water reclamation plant. Chip making is a water-intensive process, and Arizona, which is largely desert, is increasingly struggling with water shortages.

TSMC's Liu said its Phoenix factories are expected to create 13,000 high-tech jobs, including 4,500 under TSMC and the rest filled by suppliers.

Biden has sought to boost semiconductor production after the pandemic caused supply chain problems that led to shortages of chips for vehicles and many other items.

U.S. semiconductor production accounts for just 12% of the global total, down from 37% two decades ago, said a White House report on supply chain problems last year.

Taiwan's dominant position as a maker of chips used in technology from cellphones and cars to fighter jets has sparked concerns of over-reliance on the island, especially as China ramps up military pressure to assert its sovereignty claims.

China claims Taiwan as its territory but the democratically elected government in Taipei rejects Beijing's sovereignty claims.

The $52.7 billion Chips and Science Act, signed into law by Biden in August, is aimed at preventing a resurgence of supply chain woes.

Biden's trip to Arizona marks "a significant milestone that TSMC is reaching in bringing the most advanced semiconductor manufacturing back to the U.S.," said Brian Deese, director of the White House National Economic Council.

Biden's victory in Arizona in the 2020 presidential election helped catapult him to the White House. Republican Donald Trump had won the state in 2016.

Biden has said he intends to seek a second four-year term in 2024.

TSMC triples Arizona chip plant investment, Biden hails project
 

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Comments (5)
Benjamin USA
Benjamin USA Dec 08, 2022 4:54PM ET
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Uh oh this is sure to trigger some Rw domestic terr/.orists. How long till they shoot up this plant too, just like in NC?
Notvery Goodathis
Peteymcletey Dec 06, 2022 10:33PM ET
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Trump was demonized when he wanted to do similar stuff. but now... it's ok... weird
First Last
First Last Dec 06, 2022 10:33PM ET
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Cite some specific examples.
Teena Marie
Teena Marie Dec 06, 2022 10:33PM ET
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It was before COVID and not much of a cohesive plan. It looked like cherry picking a few limited areas. In the House and Senate, he was toxic pushing tax incentives that Democrats wouldn't support and increased spending that Republicans wouldn't support. He did himself no favors using Twitter to badger CEOs, and the cities, states, and agencies he didn't like.
Benjamin USA
Benjamin USA Dec 06, 2022 10:33PM ET
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Always some trump simp out there begging him to plow their hole for some reason. Thanks petey
Brad Albright
Brad Albright Dec 06, 2022 10:13AM ET
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Bringing critical industry to American shores. This is what America First looks like when it is more than a slogan.
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First Last
First Last Dec 06, 2022 10:13AM ET
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Brad Albright   I thought I was very clear w/ my 1st post.  I even quoted the article.
Brad Albright
Brad Albright Dec 06, 2022 10:13AM ET
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First Last I as replying to Jon Gr.
First Last
First Last Dec 06, 2022 10:13AM ET
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Brad Albright   I know.  I was addressing Jon's confusion.
Jon Gr
Jon Gr Dec 06, 2022 10:13AM ET
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Brad Albright dont get upset I only pointed out in my original response that this was a win for Trump’s Amercia First agenda in MAY of 2020. Im in agreement with First’s other post that it can be a win win and it was a win then and a win when the CHIPS act was passed in a bipartisan vote.
Teena Marie
Teena Marie Dec 06, 2022 10:13AM ET
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First Last I lost track of the thread, didn't know what the deal was with Tuesday. Thought I was onto something when I checked my calendar before commenting (ggg).
Frank M Sobayo
Frank M Sobayo Dec 06, 2022 9:13AM ET
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Warren B. put his money at the right place. TSMC will be protect by US gouv. The little Taiwan will be in Arizona. XI will not happy about !  Trump slide again ...
Dennis Chuck
Dennis Chuck Dec 06, 2022 8:13AM ET
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Taiwan - lackey of Us
 
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