T.S.M.C. Is Set to Build a U.S. Chip Facility, a Win for Trump

San Francisco – Taiwan Semiconductor Manufacturing Company has agreed to build an advanced chip factory in the United States in response to the Trump administration’s growing concerns about the security of the global electronics supply chain and its tensions with China.

The decision has been taken by TSMC, which operates a large-scale plant in Taiwan to produce chips used in many smartphones and many other devices, was confirmed late Thursday after earlier press reports .

T.S.M.C. The factory will be built in Arizona, with unspecified support from the state and federal government. T.S.M.C. Its own investment in the plant is estimated at $ 12 billion from 2021 to 2029, predicting that it will directly employ about 1,600 people while indirectly creating thousands of other jobs.

But T.S.M.C. Estimates of the plant’s output indicate that it will be about one-fifth the size of the company’s largest “GigaFabs” as the company calls them. It plans to use production technology this year that is unlikely to be the most advanced of the company when it is scheduled to begin operations in 2024.

Nevertheless, the move appears to be a victory for the Trump administration, which has called for building US manufacturing capabilities and criticized the fragility of a technological supply chain centered in China. Mr. Trump has built a key tenet of his administration over China, waging a trade war last year and limiting the capabilities of Chinese technology companies to trade in the United States over national security concerns.

Deal with T.S.M.C. The use of American technology in foreign manufacture of products could be coupled with a relaxed ban, with two people briefed on the deliberations. This will be a relief for Chinese leaders and Huawei, the telecommunications equipment giant and T.S.M.C. A major customer of, which was facing a possible limit on the amount of US technology.

T.S.M.C. In his declaration did not mention any such proposal. A T.S.M.C. The spokesperson said the decision for the factory was based on business needs, not part of any negotiations to relax the business. “This US facility not only enables us to better support our customers and partners, it also gives us more opportunities to attract global talent,” the company said in a news release.

The administration’s restrictions about Huawei have been partially tied to White House concerns.
The Trump administration appears ready to extend a temporary license on Friday that allowed American companies to continue doing business with Huawei, one of the people saying the firm was placed on a blacklist last year.

White House officials hold the TSMC Declined to comment on plans, which were Previously stated By The Wall Street Journal.

Defense Department officials have worried for years about the lack of US factories capable of producing the most advanced chips, concerns that have prompted negotiations with companies that include Intel, Samsung Electronics and GlobalFoundry. Concern has spread to other branches of the government as some chips are being used by TSMC. Military and civilian hardware have become important.

Industry officials said coronovirus, which sent shock waves through supply chains in Asia, coupled with rising tensions with the Chinese government, added new pressures to government action.

But money is a significant barrier to building new chip plants. Advanced semiconductor factories, which process and slice silicon disks to make chips, now cost upwards of $ 10 billion to get up and running.

T.S.M.C President Mark Liu told The New York Times in October that T.S.M.C. A potential US plant was negotiated with the Department of Commerce, but said it would require substantial government subsidies. How much, if any, public money could be associated with the company’s decision was not clear.

In an investor call last month, Mr. Liu said there was a “cost difference” to building an American plant that was difficult to accept at this point. Certainly, we are doing a lot of things to reduce that cost difference. ”

Any US subsidy for a foreign-based chipmaker can become controversial. Intel, which operates large factories in Oregon, Arizona and New Mexico, recently wrote a letter to Pentagon officials describing cooperation aimed at designing a commercial US chip factory that also sensitive military products. Can make

In an April 28 letter, Robert Chief Executive Officer Robert Swan stated, “Currently we think it is in the best interests of the United States and Intel to consider how Intel for a comprehensive supply of microelectronics to a commercial U.S. foundry Can operate. ” Previously reported By The Wall Street Journal.

An Intel spokesperson declined to comment on T.S.M.C. decision. GlobalFoundries, an Abu Dhabi-owned company that manufactures chips in the United States for the Pentagon at former IBM factories, questioned whether the money would be transferred to T.S.M.C. The best way was to reduce dependence on foreign vendors.

“Does this make any sense?” Asked Laurie Kelly, the company’s vice president for global communications. “There are so many other options.”

Electronic advances, especially chips designed by American companies, have long been important to America’s military progress. But many of the chips’ domestic production lines have moved overseas, raising questions about political or military crises in overseas supply disruptions. Examples include programmable chips used in fighter jets and 5G communications chips, which are now almost exclusively T.S.M.C.

Some officials in the Trump administration have supported putting more pressure on Taiwan and T.S.M.C. To choose between supplying chips to China, or the United States. At the same time, the Trump administration has tried to scale back factory activity in the United States, with some officials set to declare victory as the 2020 election approaches.

In an opinion excerpt in The Times on Monday, the United States Trade Representative, Robert Lighthizer, wrote, “The era of reflexive offshoring is over.”

But Brad Setter, a senior fellow of international economics at the Council on Foreign Relations, said Mr. Lehizer’s argument was “a statement of hope over reality.” Factory production data through March indicate “just a decline in U.S. production, not resurgence”.

Don Clark reported from San Francisco and Ana Swanson from Washington.

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