Taiwan's leaders praise $100 billion TSMC investment in Arizona as a supply chain model

In a meeting held recently, Taiwan's President William Lai Ching-te met with Arizona's Governor Katie Hobbs to discuss the significant investment by Taiwan Semiconductor Manufacturing Company (TSMC) in Arizona. TSMC is committing $100 billion to establish three chip foundries, an R&D center, and two packaging facilities in the state. This investment is seen as a strategic move to reduce dependence on Chinese semiconductor suppliers, especially in light of growing geopolitical tensions. TSMC has a history of significant investments in the U.S., with a prior commitment of $65 billion for additional foundries in the region. During the discussions, Lai emphasized that both Taiwan and Arizona are collaboratively working towards creating a “non-red” supply chain, which deliberately excludes suppliers based in China. This collaboration is pertinent as China has made military threats asserting its claim over Taiwan. In this context, the partnership seeks not only to bolster supply chain resilience but also to align technology production with broader geopolitical goals. TSMC, which accounts for over 90% of advanced semiconductor manufacturing, indicated that its U.S. developments would not compromise its operations in Taiwan, where it employs around 10,000 people focused on cutting-edge chip research. Governor Hobbs shared her enthusiasm regarding Arizona's evolving role as a significant hub for advanced manufacturing, predicting the creation of 40,000 construction jobs over the next four years. Additionally, the project is expected to provide tens of thousands of jobs in technology and manufacturing sectors. Hobbs highlighted that TSMC's investment would not only advance global technology, including artificial intelligence, but also serve to strengthen U.S.-Taiwan relations amidst rising tensions with China. The essence of this collaboration highlights the intersections in economic and foreign policy, illustrating how chip manufacturing has become a central issue within broader discussions of national security and economic independence from China. As Taiwan pushes to foster a self-reliant semiconductor supply chain, the sizeable investment by TSMC stands as a pivotal moment in U.S.-Taiwan economic relations, reflecting a shared commitment to security and technological advancement in the face of challenges posed by Chinese aggression.