World's Top Chipmaker TSMC plans Arizona factory expansion

TSMC (2330.TW), the world's largest contract chipmaker and a major supplier to Apple Inc (AAPL.O), said on Wednesday it was constructing a building that could serve as its second chip factory in Arizona in the United States.

Taiwan Semiconductor Manufacturing Co Ltd said in an emailed statement to Reuters that it could use the building for future expansion but has not yet arrived on a final decision for a second chip manufacturing plant.

"In light of the strong customer demand we are seeing in TSMC's advanced technology, we will consider adding more capacity in Arizona with a second fab based on operating efficiency and cost economic considerations," the company said.

The Wall Street Journal first reported that TSMC's investment in Arizona is expected to be around $12 billion which it committed two years ago, citing sources.

Last year, Reuters reported TSMC's plans to build more chipmaking factories in Arizona, including discussions about whether its next plant should be a more advanced which could make chips with 3-nanometer technology compared to the slower, less-efficient 5-nanometer tech used in the existing factory.

The United States has been encouraging foreign tech firms to manufacture in the country and has actively supported local research, development and manufacturing after passing its CHIPS Act.

While the chips sector is bracing for waning demand as red-hot inflation squeezes spending, Taiwan faces a tougher situation - sandwiched between its largest export market China and its main international backer and arms supplier, the United States - especially as Beijing steps up military pressure to force Taipei to accept Chinese sovereignty claims.

Taiwan semiconductor, aka tsmc, is the Nexus and situs of the world’s most advanced chip fabrication technology. Not maybe. This is undeniable fact.

In the context of a potential Chinese takeover of Taiwan or invasion of Taiwan or whatever term one would like to use, tsmc is without question both the GDP-based and Technology based and (US, yes, the US) National Security based Crown Jewel. My understanding is that there are chips present in our most advanced weapon systems fabricated at tsmc, and nowhere else, and nowhere else at the moment can make them, because there is that much of an edge in the technology available and in use at that one specific location.

I myself do not have a particularly sanguine opinion of how the possible outcome of a Chinese takeover attempt of Taiwan would play out. Would it be a klutzy, bloody, destructive slugfest like Russia and ukraine? Would it be a lightning strike potentially over in days? Would It ultimately involve the US as part of the US longstanding commitment to defend taiwan? Or would it just be a high tension blockade of Taiwan? I am not smart enough to know, but I know that while tsmc may not be the spiritual or nationalistic or hegemonic crown jewel of a take over exercise, we can be 100% damn sure it is the economic amd nat’l security one. There isn’t the slightest bit of nuance about this. In short, I believe that if tsmc fell into the hands of the ccp, it would be more than one Quantum Leap Forward for the ccp’s military/technological prowess, and more than one Quantum Leap backwards for our ability to equip our military. And I would consider that a terrifying schism in the present day military balance of power between the CCP and the usa. That should be plenty of alarming. But now let’s couple that with the notion that perhaps 1/3 of our government is bought and paid for by the CCP, and the threat only grows in ominousness if that is a word.

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