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Taiwan Semiconductor Manufacturing will invest $100 billion into five new fabrication facilities in Arizona, President Trump announced yesterday (CNBC).

• President Trump called the investment a “tremendous move by the most powerful company in the world.”

The background: “TSMC, the world’s largest contract chip maker, set down roots in Arizona in 2020, when it said it would build a chip factory there for $12 billion,” according to The Wall Street Journal (subscription).

• “Its ambitions for the site have expanded rapidly since, with two more factories on the same site and a total investment of $65 billion. The company’s first factory began mass production late last year.”
• Thanks to the 2022 CHIPS and Science Act, which poured billions of dollars into U.S. chip manufacturing, TSMC received $6.6 billion in federal grants.

Moving to the U.S.: The U.S. government is incentivizing TSMC to move more of its operations to the U.S., including advanced chip packaging facilities.

• “Advanced chip packaging is particularly critical for AI-related chips, as it enhances performance by integrating multiple semiconductor components, reducing size, improving power efficiency and ensuring faster data transfer—key factors for AI applications.”

The big picture: Since chips are essential to everything from autos to military technologies to AI innovation, U.S. officials are focused on ensuring that the U.S. produces the most advanced varieties.  

The NAM says: “President Trump understands that growing domestic semiconductor production is critical for a competitive manufacturing industry, and today’s $100 billion investment from TSMC makes our country stronger. When #ManufacturingWins, America wins,” NAM President and CEO Jay Timmons wrote.