December 17, 2022

The World’s Biggest Chipmaker Is Making a Multi-Billion Dollar Investment in the US Even Though It’ll Cost Way More to Make Chips There. Here’s Why It Decided to Do It Anyway.

Source: Business Insider

Journalist: Jacob Zinkula

The factories will be partially subsidized by the US government through the CHIPS and Science Act, a package passed in August that provided $52 billion to boost US semiconductor chip production.

And even if production is more expensive, Patel says TSMC's customers will be "happy to pay a little bit more" to ensure supply chain diversity, something many companies are focused on given the supply chain challenges of the last few years.

This includes Apple, TSMC's largest customer that accounted for 26% of its revenues last year. Apple CEO Tim Cook has already said the company will be the factories' largest customer once they go online.

"TSMC leadership sees the benefit in having some geographic diversity in its operations," Martijn Rasser, a former CIA officer who is now a security and technology expert at the Center for a New American Security, told Insider, "particularly when it is heavily courted by the governments of the world's leading economies."

As Rasser alludes to, winning the favor of the US government could be another factor at play.

Read the full story and more from Business Insider.

Authors

  • Martijn Rasser

    Former Senior Fellow and Director, Technology and National Security Program

    Martijn Rasser is the former Senior Fellow and Director of the Technology and National Security Program at CNAS. Prior to joining CNAS, Rasser served as a senior intelligence ...