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Taiwan will produce semiconductors in the United States

Taiwan Semiconductor Manufacturing Co. To build a second semiconductor plant in Arizona and increase its investment to $40 billion. The additional facility will be operational by 2026 and will be the first facility in the United States to produce 3nm chips, currently the most advanced. Nanometer size refers to the distance between transistors on a chip—the smaller the number, in general, the more powerful the chip. As the “brains” of electronic devices, these chips are vital to everything from smartphones and self-driving vehicles to supercomputers and artificial intelligence technologies. The opening of factories will further stimulate the economy of Arizona, which has been hit hard by the pandemic. The unemployment rate in Phoenix was 6.5% in 2020, when more than 9,000 city residents filed for bankruptcy. Since then, the unemployment rate has fallen to 3.2%. The state’s economy grew 6.3 percent in 2021, the most growth in 16 years.

Taiwan-based TSMC is the world’s largest chip maker and a major supplier to Apple. The first factory, which is expected to start production in 2024, will produce 4-nanometer chips of the type used in the iPhone 14 Pro processors. TSMC’s announcement comes as Washington is pressing hard on vital onshore semiconductor manufacturing. In addition to their economic importance, chips are also seen as vital to national security. It is a sentiment reflected in the latest round of export controls imposed by Washington on China in an attempt to curb its progress in semiconductors. In early August, Biden signed the CHIPS and Science Act into law setting aside $52.7 billion in loans, grants and other incentives, plus billions more in tax credits to encourage investment in semiconductor manufacturing in the United States. And keep China’s competition at bay. In addition to TSMC’s expanded investment plans, Samsung is also building a $17 billion factory in Texas, while major US chip maker Intel has invested at least $40 billion to build factories in Arizona and Ohio.

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Taiwan and the Great Power Conflict between the United States and China

Rising political tensions between China and Taiwan, the self-ruled democratic island and home of TSMC that Beijing regards as part of its territory, has accelerated Washington’s push to diversify chip production. However, not everyone in Taiwan shares this confidence. Businesses and residents are used to being an indispensable part of the global supply chain. However, this makes the country a risk from the point of view of international customers. China has repeatedly threatened to invade the island, which Beijing considers a renegade province. In this case, the West will lose the most important supplier of chips.

Earl Warner

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