TSMC is building a chip factory in Arizona — and considering constructing several on the site — in a project seen as key to U.S. national security
By Jeanne Whalen and
August 2, 2022 at 5:29 p.m. EDT
House Speaker Nancy Pelosi (D-Calif.) will meet with the chairman of Taiwan’s biggest semiconductor manufacturer during her visit to the island, in a sign of how vital computer chips are to the U.S. economy and national security.
Pelosi and the chairman of Taiwan Semiconductor Manufacturing Company (TSMC), Mark Liu, will discuss implementation of the recently passed Chips and Science Act, which provides $52 billion of federal subsidies for domestic chip factories, according to people familiar with the matter, who spoke on the condition of anonymity to discuss Pelosi’s sensitive schedule.
The meeting, planned for Wednesday Taiwan time, comes as TSMC builds one chip factory in Arizona and considers expanding that project to include additional factories on the same site, one of the people said.
The tiny electronic components are the brains that power all modern electronics. They have been in short supply globally for nearly two years due to soaring demand and a scarcity of the expensive factories needed to make the components, prompting countries around the world to scramble to construct more manufacturing sites.
TSMC is the world’s biggest chip manufacturer and a vital supplier to the United States and other Western nations. It is by far the largest of Taiwan’s chipmakers, which together produce more than 90 percent of the world’s highest-tech chips, according to the Semiconductor Industry Association.
The United States uses TSMC-manufactured chips in military equipment, including F-35 fighter jets and Javelin missiles, and in the supercomputers at U.S. national labs, according to one of the people familiar with the meeting. Major consumer electronics companies including Apple also rely on a variety of TSMC-manufactured semiconductors.
U.S. officials have grown alarmed about that reliance in recent years given China’s bellicose rhetoric toward Taiwan, a self-governed democracy that Beijing claims as its territory despite never having ruled it. Those concerns have prompted officials and lawmakers to press TSMC to build manufacturing facilities in the United States.
In May 2020, TSMC agreed to build a $12 billion factory in Arizona to produce chips with transistors sized at five nanometers, a high-tech type of semiconductor used in consumer electronics. For comparison, the average human hair is about 60,000 nanometers thick.
That construction is underway and aimed for completion late next year, on a plot of land in north Phoenix that can accommodate several additional factories. TSMC is now considering expanding its plans to construct additional plants on the site, one of the people familiar with Pelosi’s planned meeting said.
In an interview in June, a Taiwanese minister and TSMC board member said the company’s pace of construction at the Phoenix site would depend on passage of the federal subsidy law, which Congress approved last week. President Biden is expected to sign it imminently.
One obstacle TSMC is encountering in Arizona: There aren’t enough trained semiconductor engineers in the area to staff the facility, the minister and board member, Ming-Hsin Kung, said. So the company has started sending new employees to Taiwan for training, including professionals skilled in other types of engineering, he said.
About 250 have already made the trip for training, including hands-on work at TSMC’s chip factories.
By Jeanne WhalenJeanne Whalen is a reporter covering business around the world. She previously reported for the Wall Street Journal from New York, London and Moscow.