**Washington**: TSMC’s recent $100 billion investment in Arizona, building on earlier commitments, highlights the importance of the US Chips Act in boosting domestic semiconductor production and addressing national security concerns. However, challenges remain, particularly regarding workforce skills and bipartisan political support.
At the beginning of this month, a notable announcement was made involving President Donald Trump and CC Wei, the chief executive officer of Taiwan Semiconductor Manufacturing Company (TSMC), regarding a significant investment in the United States’ semiconductor manufacturing sector. The two revealed that TSMC will invest an additional $100 billion into its chip fabrication site located in Arizona, building upon an earlier commitment of $65 billion. TSMC is widely acknowledged as the world’s leading manufacturer of semiconductors, particularly excelling in the production of advanced “leading-edge” logic chips. This move is seen as a critical step towards enhancing US national security, as mentioned in a detailed piece by a former director of the Chips Program Office at the US Department of Commerce.
However, the announcement has prompted some members of the current administration to challenge the effectiveness of the US Chips Act, which has served as a vital catalyst for TSMC’s recent investments. Critics, including Trump, have positioned the 2022 act as a partisan initiative linked to the Biden administration, suggesting that existing tariffs could suffice in revitalising US semiconductor manufacturing. In response to these criticisms, the former Chips Program Office director asserts that the Chips Act is central to a long-term strategy intended to bolster domestic semiconductor production, which has declined dramatically over recent decades.
From 1990, the US share of global semiconductor manufacturing has fallen from nearly 40% to approximately 10%, with advanced manufacturing dwindling to zero. This has raised concerns regarding the vulnerabilities created by dependence on foreign production, particularly in Taiwan, and highlighted the significant investments made by competitor nations like China to dominate the sector.
Action was prompted in 2020, when officials in the Trump administration sought engagement with TSMC to secure a $12 billion commitment for building a fabrication facility in the US. This initial engagement paved the way for bipartisan discussions that led to the Chips Act. The act has allocated $39 billion in grants and introduced a 25% tax credit aimed specifically at jumpstarting US semiconductor manufacturing, along with an additional $13.7 billion focused on research and development, workforce training, and global supply chain resilience.
The positive outcomes following the implementation of the Chips Act have been profound, leading to a historical boom in domestic semiconductor investments. TSMC’s recent announcement includes plans to establish two advanced packaging facilities and a centre for research and development, thereby reinforcing their commitment to the United States and signalling a robust economic future.
Beyond TSMC, the success of the Chips Act has catalysed over $500 billion in semiconductor investments, a sum greater than the cumulative investments made over the previous three decades. All five leading-edge chip manufacturers — Intel, Micron, Samsung, SK Hynix, and TSMC — have begun operations within the United States, a notable achievement given that no other country currently hosts more than two of these manufacturing giants.
As the US aims to develop its semiconductor manufacturing capabilities, challenges persist, particularly concerning the availability of a skilled workforce. According to Michael Moats, a professor at Missouri University of Science and Technology and author of a detailed piece on the topic, a significant labour gap must be addressed to ensure that new semiconductor plants can be effectively operated. The industry is projected to require approximately 300,000 engineers by 2030.
Moats advocates for the enhancement of educational programmes to close this skill gap, suggesting that universities and industry partners need to collaborate to design curricula that train the next generation of semiconductor engineers and technicians. Initiatives such as a new multidisciplinary bachelor’s degree in semiconductor engineering, which will be launched at Missouri University of Science and Technology, represent steps towards addressing this growing demand.
As the race to secure semiconductor supply chains continues, the emphasis is not only on economic recovery but also on technological advancement across various sectors including artificial intelligence and quantum computing. The future of US semiconductor manufacturing hinges on the ability to cultivate a skilled workforce alongside expanding production capabilities.
Source: Noah Wire Services
