President Joe Biden traveled to Arizona on Tuesday to celebrate the first installation of equipment at a forthcoming semiconductor chip plant, part of the White House’s plan to boost American competitiveness in tech manufacturing.

What You Need To Know

  • President Joe Biden traveled to Arizona on Tuesday to visit a forthcoming semiconductor chip plant being built in Phoenix, celebrating the White House's plan to boost American competitiveness in manufacturing

  • Taiwan Silicon Manufacturing Co. announced a $40 billion total investment in its new Phoenix-area plant, which is expected to create 10,000 tech jobs and more than 10,000 construction jobs

  • Apple reportedly plans to step up its chip sourcing from the TSMC Arizona facility — TSMC produces the A-series and M-series silicon processors used throughout Apple's product lines

  • The White House touts expanded tech manufacturing investment in the U.S. as a result of the CHIPS and Science Act, which Biden signd into law this year, and designates about $106 billion to semiconductor development

The trip to Taiwan Semiconductor Manufacturing Co.’s new plant, being built in north Phoenix, is also both a celebration of Biden’s policies seeking to drive up tech manufacturing in the U.S., and of TSMC’s plans to expand their investment in American semiconductor manufacturing.

Biden toured the planned site, which is still an active construction zone, before delivering remarks on Tuesday afternoon to tout his administration's investments in plants similar to the one where he stood. 

"For a lot of families, things are still pretty rough," the president said, acknowledging that the pandemic and an a resulting economic downturn – combined with increased prices on goods like food and gas – have strained Americans' wallets in recent years. "But there are bright spots where America is reasserting itself. The innovation and manufacturing boom here in Arizona, Arizona is one of those places."

The president went on to describe a recent trip overseas where he met with world leaders from countries like Egypt and Indonesia, saying it became clear during the meetings that the United States "is better positioned than other nations lead the world economy in the years ahead."

"If we keep our focus there's a strong sense from many from all the world leaders of the resiliency of the American economy," Biden continued. "And we're seeing it here at home with investments like what we're talking about here today." 

TSMC bought land in Phoenix in 2020, with plans to bring a plant online in 2024. Within a year, reports began circulating that TSMC would scale up its plans — its original planned $12 billion investment has now increased up to $40 billion, including a handful of additional fabrication facilities with the goal of producing 3 nanometer chips by 2026. The fabrication facilities are expected to create 10,000 tech jobs, and more than 10,000 construction jobs.

All told, TSMC's $40 million sum is "the largest foreign investment in the history of this state," Biden said Tuesday.

“In terms of scale, this is the largest foreign direct investment in Arizona history, and one of the the largest in U.S. history,” National Economic Council Director Brian Deese said on a call with reporters ahead of the visit. 

“It means more workers in these major factories, but it also means more opportunities for suppliers and contractors, good paying construction jobs, opportunties for small- and medium-sized manufactures and suppliers,” and opportunities for communities across Arizona, Deese added.

During Biden’s visit, the company also announced plans to develop more chips, going from 5 nm chip production to 4 nm chip production, according to White House officials.

What that all means is that TSMC expects to produce new, faster, more powerful generations of semiconductor chips in Arizona — an expansion that the White House believes has been driven in part by new laws championed by Biden.

Deese also noted that Arizona is seeing growth among major tech manufacturing investments from a handful of companies, including chip manufacturer Intel, battery storage manufacturer KORE Power and fiber optic cable manufacturer Corning.

“We have seen American manufacturing coming back to the U.S., and a lot of that is because of the president's economic policies,” said White House Press Secretary Karine Jean-Pierre. “We've seen more than 700,000 manufacturing jobs created under this president, and he is going to continue to talk about that, talk about the CHIPS and Science Act and that historic piece of legislation.”

Earlier this year, Congress passed Biden’s CHIPS and Science Act, which seeks to expand semiconductor manufacturing in the U.S. with a series of incentives. All together, the CHIPS Act designates about $106 billion to semiconductor development, including $39 bilion in tax benefits and incentives, $11 billion in research and development, $24 billion for an advanced semiconductor manufacturing tax credit, workforce development programs and more.

TSMC is among the world’s largest chipmakers, and is a major supplier to Apple — the company produces the A-series and M-series silicon processors used in all of Apple’s products. According to Bloomberg, Apple is planning to source chips from its devices from the Arizona plant, and move away from its reliance on Asian manufacturing.

Ronnie Chatterji, the NEC’s Acting Deputy Director for Industrial Policy, added that TSMC’s Arizona fabrication plants “could meet the entire U.S. demand for advanced chips when they’re completed” — meaning not just computers, tablets, phones and cars, but even smart devices across the home.

“We saw during the pandemic that something we took for granted, global supply chains, were actually a key vulnerability both for our economic and our national security,” Chatterji said, which directly impacted both auto manufacturing and American defense systems. “This investment…shows that our supply chains are resilient, that we can make this here in America.”

It’s not yet been confirmed that TSMC will be receiving money earmarked in the CHIPS and Science Act — according to White House officials, the guidance for funding applications has not yet been released, but Chatterji noted that manufacturers have repeatedly cited the legislation as their reasoning for investing in the U.S.

When reporters noted that TSMC isn’t a company based in the United States, and that encouraging foreign investment might mean that the U.S. is helping to other countries, like China, lead manufacturing.

“When people come and invest in the United States, and hire American workers and build capability in communities like int he greater Phoenix area, what it does is it builds our innovative capacity as a country, in addition to putting Americans to work,” Deese said. “One of the markers of that strategy being successful is that you’re seeing a surge in investment in the United States, being made both by American companeis but also global companies.”

Apple CEO Tim Cook was among Biden’s guests at the visit, alongside TSMC founder Morris Chang, Micron CEO Sanjay Mehrotra, NVIDIA CEO Jensen Huang, as well as local political leaders including Sen. Mark Kelly, D-Ariz., Governor Doug Ducey and Governor-elect Katie Hobbs and former Congressmember — and Kelly’s wife — Gabrielle Giffords.

"I've never been more optimistic about America's future, and I really mean that," the president concluded Tuesday's speech. "Never. We're building a better America. We just have to keep going. And I know we can."