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Biden says American manufacturing is back as TSMC expands in Phoenix

President Biden spent Tuesday touting a newly announced factory by Taiwan Semiconductor Manufacturing Company (TSMC) in north Phoenix as an economic boon for Arizona and part of a resurgence of American manufacturing.

Context: Biden's visit coincided with the company's announcing its plans to begin construction on a second semiconductor fabrication plant, or fab, in 2024 near its current site under construction.

  • The first one broke ground in north Phoenix in 2021 and is expected to begin production in 2024.

Zoom out: Biden said the U.S. produced about 30% of the world's semiconductors 30 years ago but only about 10% now.

  • He noted that Apple will be a major customer of the new TSMC factories, and that the company will now be able to move more of its supply chain to the U.S.

  • "These are the most advanced semiconductor chips on the planet, chips that power iPhones and MacBooks, as Tim Cook can attest," he said, referring to Apple's CEO, who spoke at the event. "It could be a gamechanger."

Catch up quick: Biden signed the $280 billion Chips and Science Act in August to promote semiconductor manufacturing in the U.S.

  • Phoenix Mayor Kate Gallego credited the legislation with helping to bring the second fab to Arizona.

  • TSMC is expected to apply for federal grants for both phases of the project, The New York Times reported.

Details: The second facility is expected to be open by 2026, and will produce advanced 3-nanometer chips. Both sites are expected to produce about 600,000 semiconductor wafers annually.

  • The expansion will increase TSMC's investment in the north Phoenix site to $40 billion, up from $12 billion.

  • Its chairman, Mark Liu, said the expansion will create 21,000 construction jobs and 4,500 full-time, high-tech and high-paying positions. That's a substantial increase from the 10,000 construction jobs and 2,000 full-time positions from the first factory.

  • He also expects about 40 supplier companies to locate in the area, which TSMC expects to create 13,000 more jobs.

Why it's important: The new sites could bring thousands of high-tech jobs to the Valley, attract many others from associated companies and boost the state's high-tech manufacturing sector.

  • It will also create domestic semiconductor manufacturing for the U.S., shifting more of the industry away from Taiwan, where it faces potential military threats from China.

  • Advanced Micro Devices, Apple, NVIDIA and other tech companies will buy semiconductors produced at the Phoenix plants.

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