from the letting-the-chips-fall-where-they-may dept.
Taiwan's TSMC or the Taiwan Semiconductor Manufacturing Co Ltd. announced on Tuesday that they will be tripling their planned investment at the Arizona plant in the US to a total of $40 billion. US President Joe Biden, who visited the TSMC plant in Arizona, hailed the project as it emerges as one of the largest foreign investments in US history.
[...] Mark Liu, the chairman of TSMC estimates to have an annual revenue of $10 billion when the two planned chip fabrication plants open, adding that customers would have annual sales of $40 billion from products using chips made there.
Three of TSMC's largest customers, Apple Inc, NVIDIA Corp and AMD Inc, have stated that they expect to source most of their upcoming chips from the American plants of TSMC.
Apple meanwhile, has stated that going forward, they will only be using chips that have been made at an American TSMC plant. Speaking at the event, Apple's CEO Tim Cook said, "We work with TSMC to manufacture the chips that help power our products all over the world. And we look forward to expanding this work in the years to come as TSMC forms new and deeper roots in America."
[...] Taiwan's dominant position as a maker of chips used in technology from cellphones and cars to fighter jets has sparked concerns of over-reliance on the island, especially as China ramps up military pressure to assert its sovereignty claims.
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The capital injection is part of the $40 billion investment announced in December:
Taiwan Semiconductor Manufacturing Company (TSMC) board has approved a plan of capital injection of up to $3.5 billion to TSMC Arizona, the company said.
In December, the foundry behemoth announced its plans to open a second chip factory in Arizona, boosting its investment in the US threefold to $40 billion. This represented "the largest foreign direct investment in Arizona history and one of the largest foreign direct investments in the history of the United States," the company said.
The capital injection is part of the $40 billion investment announced in December.
"When complete, TSMC Arizona's two fabs will manufacture over 600,000 wafers per year, with estimated end-product value of more than US$40 billion," the company announced in its December statement.
TSMC's US investments are part of the chipmaker's strategic move to expand beyond Taiwan, due to the country's political tensions with China.
Last month, the company said it is considering opening its first plant in Europe and a second one in Japan. The Europe plant is likely to come up in the German city of Dresden.
Related: TSMC Triples Arizona Chip Plant Investment, Apple Confirms to Only Use Chips Made in the US
(Score: 2) by gznork26 on Wednesday December 14, @04:17AM (3 children)
This is the sort of deal that has an interesting ambiguity. A foreign-based corporation builds a plant in the US, and US-based companies crow about sourcing the product from the US. PR points to the company claiming to use parts made in the US. Wages to the employees is spent domestically, but what percentage of those employees will be US citizens, and what percentage will be foreign nationals working in the US on green cards? How much of the non-manufacturing work will be outsourced overseas? How much of the component parts will be sourced overseas? And finally, since the company is foreign, the profits from the operation are removed from circulation in the US and fill the coffers of the foreign company.
What's the net result in the long run? Is this good or bad for the actual US economy? Overall, it seems rather murky, but the PR messaging will whitewash any downsides. Does anyone here have an insight on this?
(Score: 2) by takyon on Wednesday December 14, @04:45AM
America already has an insatiable desire for phones/computers with TSMC-made chips in them, and TSMC is the dominant manufacturer of semiconductors [cnbc.com]. We typically enjoy cheaper prices than the rest of the world, but this should help ensure an even better supply, with less waiting around for shipments by boat. I think other parts of the supply chain could also be moving here.
The original Arizona plans were for "5nm" (N5) nodes, later including N4, and now they have confirmed that they will make "3nm" (N3), the last TSMC family of nodes to use FinFET instead of gate-all-around (GAA).
The geopolitical angle can't be ignored. There is a nonzero chance that China will go to war with Taiwan, resulting in the seizure, destruction, or disruption of TSMC's fabs in Taiwan. Suddenly, having these slightly behind state-of-the-art fabs around is a great boon for the host country. If TSMC in Taiwan gets wiped out, they could spin off these fabs or transform into an American-based company.
If everything remains peaceful, TSMC's apparent plan is to withhold its best nodes for manufacturing in Taiwan (currently N2 [anandtech.com]). But that doesn't mean great products can't be made with N5/N4/N3. A future budget APU/SoC on N3 would be excellent.
Whatever effect there is on the local economy and U.S. workers in general will be comparatively meaningless. But it will probably be good for those communities.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 0) by Anonymous Coward on Wednesday December 14, @05:40AM
I don't see significant downsides for the USA. Some US locals might learn a thing or two. Just like China locals learn stuff when the US manufactures stuff in China.
It's not like Apple is going to charge different prices for US made stuff even if the costs are slightly higher. And Apple making a bit less money isn't going to hurt the US that much especially since they already move most of their profits to Ireland and thus avoid paying as much tax to the USA.
TSMC is still likely to make money from this, so it's not really a big setback for them.
This might also make China slightly less likely to threaten to invade Taiwan - since they probably won't want to encourage more Taiwanese to move their stuff to the USA. Whether it changes the actual desire on an actual invasion is a different matter...
Yes this is not "Free Market" but the way the USA and most others work is - only use the "Free Market" flag/bullhorn when it benefits you.
To me the US Gov using its power to pressure the TSMC to move some stuff to the USA is a lot less abusive - compared to encouraging/starting wars in the Middle East; and chasing after Assange and Snowden. Also for this I can see some potential benefit to "normal US citizens". I don't really see how spending zillions starting wars in the Middle East or Afghanistan made life better for normal US people.
I know Biden was mentioned but if the Trump administration was mainly responsible[1] for this and delivering their promises to make it harder for China and move more jobs to the USA; I'd praise them and Trump for this.
[1] https://wccftech.com/tsmc-production-us-relocate-pressure/ [wccftech.com]
(Score: 2) by SomeRandomGeek on Wednesday December 14, @08:28PM
Their are many reasons the US might want manufacturing in the US... Keep the jobs in the US, keep the profits in the US, keep the technology in the US, etc. But in this case, the chief reason is to ensure a reliable supply chain in the event of war.
There are not many local jobs associated with this. It is an automated factory.
TSMC, a Taiwanese company, will be keeping the profits.
The technology to build one of these already only exists in Taiwan. Presumably some of it will come here.
The net result in the long run is to make the US economy more resilient, which is good for the US economy.