A new report claims the Taiwan Semiconductor Manufacturing Company (TSMC) will only complete part of the chip manufacturing process at its controversial Arizona facility. The company reportedly intends to ship incomplete products made in Arizona to Taiwan, where they will be finished and sold to major electronics manufacturers in the West.
The report, published Monday by New Information, claims sources close to the company and its new facility in Phoenix have already been informed that the plant will be used to create partially complete products. As a result, the outlet explained, TSMC’s Arizona factory will do little to create an independent supply of semiconductors based in the United States.
TSMC’s $40 billion factory “will do little to make the U.S. self-reliant in chips” because “many” of the products made in Arizona “will still require assembly in Taiwan in a process known as packaging” before they can be sold to major electronics companies including Apple, Nvidia, AMD, and Tesla.
Industry website 9to5Mac explained that packaging is the “process of placing the various circuit boards as close together as possible before encapsulating them into a single chip.” A “highly advanced process” in which TSMC “has a massive lead over its competitors,” the website notes the “sophisticated facilities” that give the company this edge “only exist in Taiwan.”
Microchip is a general term for semiconductor component products, while the term semiconductor refers to components widely used in most modern electronics. TSMC is the primary manufacturer of semiconductors for the Apple iPhone product line, and may become the sole producer of chips for new iPhones and some new Apple computers in the future.
Responding to the revelation, semiconductor analyst Dylan Patel told New Information that TSMC’s Arizona facility “is effectively a paperweight in any geopolitical tension or war” with China, or in a conflict between China and Taiwan.
Another expert told the outlet the type of sophisticated facility that could compare with those in Taiwan “is a huge expenditure,” and added, “it does not seem likely that TSMC will want to do this any time soon in the desert in Arizona.”
TSMC already announced a year-long delay in completing its microchip plant Arizona, meaning it will not open until 2025, making claims the state lacks necessary skilled labor to finish construction. It has also sought to bring up to 500 Taiwanese nationals into the United States to finish the job.
Still, the Biden administration is touting a “manufacturing boom” in Arizona in a new advertisement that began running on Labor Day. The ad, which is slated to run for 16 weeks, specifically credited “the laws that [President] Joe Biden got passed” for causing new semiconductor factories to be built in Arizona.
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Tom Pappert is the lead reporter for The Georgia Star News and a reporter for the Arizona Sun Times. Follow Tom on Twitter. Email tips to [email protected].
