Chipmaking in the Desert: Taiwan Semiconductor Manufacturing Company's Global Expansion

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On December 6, 2022, in Phoenix, Arizona, Taiwan Semiconductor Manufacturing Company (TSMC) Executive Chairman Mark Liu outlined the company's ambitious plans to invest $40 billion to build semiconductor manufacturing plants in Phoenix. The event also celebrated the passing of The Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (CHIPS and Science Act), which aimed to inject $280 billion in financial subsidies and incentives to boost domestic manufacturing of advanced semiconductors in the US and increase production capacity. As Mark Liu stared out at the desert and the soon-to-be TSMC plant, he wondered if the decision to move to the US was driven by geopolitics or business opportunity. Could the US create a credible and robust domestic manufacturing ecosystem? Time would tell whether the CHIPS Act would yield long-term results or if it was too late for the US to regain its dominance in the semiconductor industry.
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