New Arizona chip factory will still require assembly in Taiwan: report

One analyst said that the factory is "effectively a paperweight," and doesn’t reduce American dependence on foreign countries.

Hannah Nightingale Washington DC

A new report has revealed that an Arizona factory being set up by Taiwan Semiconductor Manufacturing Co (TMSC) "will do little to make the US self-reliant in chips," and that the chips made at this factory will still require assembly in Taiwan.

According to The Information, the factory, which Apple CEO Tim Cook announced alongside Joe Biden late last year, will cost $40 billion to build.

The chips at this factory, being made for companies like Apple as well as Nvidia, AMD, and Tesla, will still require assembly in Taiwan, TSMC engineers and former Apple employees told the outlet.

TSMC reportedly has no plans to build packaging facilities in the US due to costs. 

"When complete, TSMC Arizona aims to be the greenest semiconductor manufacturing facility in the US producing the most advanced semiconductor process technology in the country, enabling next generation high-performance and low-power computing products for years to come," TSMC Chairman Dr. Mark Liu said.

One analyst said that the factory is "effectively a paperweight," and doesn’t reduce American dependence on foreign countries.

"The TSMC Arizona fab is effectively a paperweight in any geopolitical tension or war [with China over Taiwan] due to the fact that it still requires sending the chips back to Taiwan for packaging,” Dylan Patel, chief analyst at SemiAnalysis, a semiconductor research firm, told 9 to 5 Mac.

In 2022, Biden signed the CHIPS Act into law, which the White House said would "boost American semiconductor research, development, and production, ensuring US leadership in the technology that forms the foundation of everything from automobiles to household appliances to defense systems."

Cook said at the December 2022 event, "And now, thanks to the hard work of so many people, these chips can be proudly stamped Made in America. This is an incredibly significant moment."

"Today we’re combining TSMC’s expertise with the unrivaled ingenuity of American workers. We are investing in a stronger brighter future, we are planting our seed in the Arizona desert. And at Apple, we are proud to help nurture its growth."

"Apple had to buy all the advanced chips from overseas, now they’re going to bring more of their supply chain home," Biden said at the time. "It could be a game-changer."

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