The Trump administration delivered a blow to the Chinese Communist Party (CCP) earlier this week with the announcement that a Taiwan manufacturer will be able to build a plant in the US, which will stifle the company's ability to sell to China's Huawei.
Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) said that it will build a new factory in Arizona as part of a $12 billion deal with the US that will "create over 1,600 high-tech professional jobs directly, and thousands of indirect jobs in the semiconductor ecosystem," according a statement.
"TSMC welcomes continued strong partnership with the US administration and the State of Arizona on this project," the company added. "The strong investment climate in the United States, and its talented workforce make this and future investments in the U.S. attractive to TSMC. US adoption of forward-looking investment policies to enable a globally competitive environment for a leading edge semiconductor technology operation in the U.S. will be crucial to the success of this project."
Reuters reported that a US Commerce Department official said TSMC's decision to start a plant in the US generated "good will" within the department and would restrict TSMC chip sales to Huawei.
Credit Suisse analysts noted that proposed restrictions could threatened TSMC's 14 percent of sales from Huawei, escalate the tension between the US and communist China, and delay the rollout of the next 5G mobile network.
Reuters added that the plant is "the biggest foreign investment by TSMC, and "will produce the most sophisticated five-nanometer chips, which can be used in high-end defense and communications devices.”
Secretary of State Mike Pompeo responded to the news on Twitter, writing: "The US welcomes TSMC's intention to invest $12B in the most advanced five-nanometer semiconductor fabrication foundry in the world. This deal bolsters US national security at a time when China is trying to dominate cutting-edge tech and control critical industries."
The U.S. welcomes TSMC’s intention to invest $12B in the most advanced 5-nanometer semiconductor fabrication foundry in the world. This deal bolsters U.S. national security at a time when China is trying to dominate cutting-edge tech and control critical industries.
— Secretary Pompeo (@SecPompeo) May 15, 2020
Pompeo said that the chip will be used for a variety of functions, including the 5G base stations and F-35 fighter jets, Reuters noted.
US Secretary of Commerce Wilbur Ross approved of the deal, saying, "TSMC's plan to build a $12 billion semiconductor facility in Arizona is yet another indication that President Trump’s policy agenda has led to a renaissance in American manufacturing and made the United States the most attractive place in the world to invest."
"This plan is the result of years of close collaboration among TSMC, the Governor of Arizona and his staff, and the Administration, particularly our Assistant Secretary of Commerce Ian Steff," Ross added.
"This announcement is the product of strong cooperation between federal, state, and local governments, leveraging the unprecedented investment climate for manufacturers created by President Trump. Our global team of Commerce professionals stand ready to work with additional semiconductor companies looking to expand their operations and investments in the United States."
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