TSMC, a major player in the semiconductor market, has found itself in the middle of geopolitical concerns, particularly the potential risk of China seizing control of Taiwan and its manufacturing capabilities. The U.S. government's investment in semiconductor manufacturing, including a recent $8.5 billion proposal for Intel, is seen as a strategy to diversify supply and reduce future disruptions. However, some have suggested drastic measures, such as bombing chipmakers, should China invade Taiwan, a move that has drawn international criticism.
Key takeaways:
- The United States Department of Commerce has proposed investing up to $6.6 billion to fund a third Taiwan Semiconductor Manufacturing Company Limited (TSMC) fab in Arizona, aiming to foster more domestic semiconductor production.
- The proposed fab will focus on 2nm or newer architectures, designed for various applications including computing, 5G/6G wireless communications, and AI. The construction is expected to create over 20,000 jobs and around 6,000 manufacturing roles once operational.
- The move could escalate tensions with China, as the U.S. and its allies would be at a disadvantage should China seize control of Taiwan and its manufacturing capabilities. There have been suggestions from U.S. officials to destroy the factories in case of such an event.
- TSMC, which makes around 90% of the world's most advanced chips, serves several major companies including Apple, Nvidia, Sony, MediaTek, AMD, Qualcomm, and Broadcom. Despite U.S. investments, Intel is still playing catch-up to TSMC's technological advancements.