Taiwan Semiconductor Manufacturing Co.’s massive economic investment in Arizona is about to get much bigger.
The company plans to announce construction of another factory when President Biden visits the north Phoenix site Tuesday, an expansion that would more than triple the company’s stake in Arizona from an original estimate of $12 billion to $40 billion.
It would also mark the state’s largest private-sector investment ever and one of the largest direct foreign investments anywhere in the United States.
Biden’s visit to TSMC is his first to the state as president. During the event, TSMC also plans to announce it will produce advanced, smaller, 3-nanometer chips by 2026 at that new factory, or fab.
The company also will announce plans to develop more advanced chips at the original facility now under construction, going from 5 nanometers in size down to 4. The expanded plan is expected to more than double the number of permanent jobs at the TSMC facility.
Semiconductors or chips are the tiny brains found in an increasing array of modern products including computers, cell phones, other electronic gear, cars and industrial products. Manufacturers that excel in smaller dimensions, measured in nanometers, can put more transistors on each chip, run more processes and reduce costs for customers. Industries that use or are expected to use the most advanced chips include aerospace, clean energy and artificial intelligence.
Dignitaries including Apple CEO Tim Cook arrive in Phoenix
Executives from some of TSMC’s most visible suppliers and customers will attend the late morning and early afternoon event at the complex near 43rd Avenue and West Dove Valley Road. The dignitaries include Apple CEO Tim Cook, TSMC founder Morris Chang, Micron Technology CEO Sanjay Mehrotra and NVIDIA Corp. CEO Jensen Huang. Apple has announced plans to buy chips made at the north Phoenix facility.
Attending government and political figures include U.S. Commerce Secretary Gina Raimondo, Sen. Mark Kelly, Gov. Doug Ducey, Gov.-elect Katie Hobbs, Phoenix Mayor Kate Gallego and several members of Congress from Arizona including Raul Grijalva, Tom O’Halleran and Greg Stanton, along with former Rep. Gabby Giffords. Like Biden, the politicians are all Democrats, aside from Ducey.
In September, Raimondo joined Kelly and local political, academic and business leaders at a semiconductor-focused discussion at Arizona State University’s research park in Tempe.
Biden to tout various benefits of CHIPS Act
The president plans to note how the new TSMC investments were encouraged by passage of legislation including the CHIPS & Science Act, which he championed. TSMC could receive federal subsidies under that legislation once the government releases funding guidelines in the first quarter of 2023.
In addition, Biden is expected to argue that Arizonans overall are feeling positive impacts from his economic policies through a relatively low unemployment rate and job creation that, he said, is helping working families including disadvantaged groups. In August, for example, the National Telecommunications and Information Administration announced $105 million for high-speed internet projects in tribal areas in Arizona.
However, Arizona and metro Phoenix also are hobbled by rising interest rates during his tenure as president that have led to a housing slowdown, and the inflation rate in greater Phoenix has exceeded that of every other large U.S. metro area throughout most of 2022.
Few details have emerged yet on other challenges the TSMC investments could entail, such as water consumption, by these large fabs. Water supplies, in particular, are getting tighter here and throughout the Southwest, with Colorado River cutbacks coming. The company plans to recycle water for multiple phases of manufacturing and other needs.
In fact, TSMC said it’s planning an on-site industrial water reclamation facility that it claims will result in nearly no liquid discharge.
“When complete, TSMC Arizona will be the greenest semiconductor manufacturing facility in the United States producing the most advanced semiconductor-process technology in the country, enabling next generation high-performance and low-power computing products for years to come,” said TSMC’s Chairman, Dr. Mark Liu, in a prepared statement.
Related:Here’s how giant semiconductor plant rising in north Phoenix will shape Arizona’s economy
Part of broad industrial strategy for US
Biden is expected to describe how the TSMC complexes and semiconductors generally fit into a broader national economic strategy focused around the CHIPS & Science Act. One goal is to provide stable, predictable federal funding that could encourage private-sector investments too, from both U.S. and foreign businesses.
The latest announcement will mean more jobs. TSMC originally was planning on hiring about 2,000 people at its north Phoenix complex, but that could rise to 4,500 including the second phase. That’s in addition to an estimated 10,000 construction jobs.
Securing a stable supply of semiconductors is another aim of the legislation and Biden’s industrial policy. A chip shortage during the COVID-19 pandemic slowed some production of automobiles and other manufacturing activity.
Investments rolling into Arizona
Other corporations also have made important investments of late in Arizona, including a $20 billion semiconductor expansion underway at Intel’s Chandler campus.
The Intel expansion was hailed as the largest private sector investment in Arizona history, a record likely surpassed by the new TSMC projects.
Biden is expected to discuss how his broad economic policies could lead to $3.5 trillion in combined private- and public-sector investments over the next decade, arguing that U.S. manufacturing is enjoying a renaissance under his leadership.
Other recent Phoenix-area corporation investments that Biden might cite include a $1.2 billion lithium-ion battery factory in Buckeye announced by KORE Power and a $100 million Corning factory in Gilbert to make fiber-optic cable. The KORE batteries are intended to be used in electric vehicles, for electric-grid storage and in other applications.
Reach Arizona Republic reporter Russ Wiles at email@example.com.
Story Credit: usatoday.com