100 Billion Dollar Investment by TSMC in the US

Back in January, we talked about the $500 Billion investment in AI being made by a consortium of private companies and banks. Now, we have another $100 Billion investment by TSMC in US chip factories. Mo’ money, mo’ money, mo’ money! Let’s chat.

TSMC? What is that?

TSMC is the Taiwan Semiconductor Manufacturing Company, which is the world’s largest dedicated semiconductor chip manufacturer. Chips are used in many of the products you use everyday like computers, cell phones, and even your washing machine. They are also in things you may not use everyday like radar, data centers, and fighter jets.

TSMC, headquartered in Hsinchu, Taiwan, was founded in 1987 by Morris Chang. Che-Chia (C. C.) Wei, who made the announcement, has been the CEO since 2013. TSMC is currently valued at around $900 Billion.

What is this money for?

TSMC is planning to build five new factories in the US. They already have $65 Billion invested in the US with three facilities in operation or under construction in Arizona.

Why is this investment important?

Obviously, this investment is important because it represents job creation in the US.

Further, this investment is important for national security. You should keep in mind that the vast majority of advanced chips are made in Taiwan. Additionally, close to 70 percent of all global chip production also happens in Taiwan.

With such a critical resource being concentrated to one country, anything that affects Taiwan’s production of chips then affects the world. Companies rely on Taiwan not only to produce products, but also their own market value and ability to conduct business. Any disruption to Taiwan’s chip production represents halt to making a number of products and thus a national security problem for the US and many other countries. Adding additional capabilities to manufacture these chips in the US means that if any problems arise with Taiwan, the US will still have stability to continue making the things we rely on.