TSMC to build a $12 billion chip factory in the US

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Maurice Tsai | Bloomberg | Getty Images

Taiwan Semiconductor Manufacturing Co (TMSC) said on Friday it will build a semiconductor facility in Arizona, as concerns grow in Washington about the security of the technology supply chain which is largely centered in Asia.

Total spending on the project will be $12 billion with TSMC claiming it will directly create 1,600 jobs. Construction is planned to start in 2021 on what would be TSMC’s second manufacturing site in the U.S. 

The factory will be focused on producing so-called 5-nanometer chips, the latest in semiconductor technology being manufactured today. 

TSMC’s decision to build a new U.S. chip plant comes as President Donald Trump’s administration continues to scrutinize the global technology supply chain upon which American firms rely on. In particular, the government has sought to reduce reliance on China, a feat that may not be so easy, experts previously told CNBC. 

During his presidency, Trump has also looked to bring manufacturing back to the U.S. 

While TSMC is a Taiwanese firm, it does have plants in China and has big Chinese customers such as Huawei. 

The Trump administration was considering a rule earlier this year, that if implemented, would require companies using U.S. chipmaking equipment to apply for a license before supplying Huawei, according to a Reuters report in March. 

TSMC said it decided to build the new plant with the “mutual understanding and commitment to support from the U.S. federal government and the State of Arizona.”

“This project is of critical, strategic importance to a vibrant and competitive U.S. semiconductor ecosystem that enables leading U.S. companies to fabricate their cutting-edge semiconductor products within the United States and benefit from the proximity of a world-class semiconductor foundry and ecosystem,” the company said in a statement.

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