Semiconductors “Made in America”: Joe Biden welcomes TSMC’s huge investments in the USA

“The United States is a privileged destination for companies that want to invest”, he welcomed, against the background of gigantic cranes, and with the assistance of the gratin of the tech – the boss of Apple Tim Cook, but also representatives of less well-known companies in the public but extremely strategic like Micron, AMD or Nvidia.

TSMC, which had already decided to settle in Arizona, a state in the southwestern United States, in May 2020 during the Trump presidency, announced on Tuesday that it was giving its project a whole new dimension.

Semiconductors: A Technological World War

There will be two factories instead of just one, tripling the investment amount from $12 billion to $40 billion. Production is expected to start there by 2024 for the former, by 2026 for the latter.

This announcement comes after promises of more or less enormous investments by other giants such as Micron, IBM, Intel and Samsung.

“I’ve never been so optimistic about the United States,” said Joe Biden, who repeats it over and over again. And the 80-year-old Democrat added, after a brief pause, “And I’ve been around for a while.”

The American president has made it known that he is acting “without complexes” to revive employment and industry in the United States.

The White House sees TSMC’s announcement as a direct result of the CHIPS and Science Act, a law that provides nearly $53 billion for microchip research and manufacturing.

The departure of Joe Biden is also very political, which keeps the suspense about a new presidential candidacy.

Arizona, long dominated by Republicans, has become a battleground where Democrats are catching up. On Tuesday, the president hailed future governor Katie Hobbs, elected in November against a radical rightist backed by Donald Trump.

He also praised the action of Kyrsten Sinema, a Democratic state senator whose radically centrist stance has sometimes gotten the White House into trouble.

Reduce addiction

Most of the US semiconductor supply comes from companies located in allied countries in Asia, but the memory of the pandemic, which has disrupted supply chains, as well as geopolitical tensions around Taiwan, push Washington to reduce its dependency .

Not to mention Joe Biden’s stated desire to challenge China technologically.

“Virtually every major tech company, including automakers and every company that uses technology, is worried about something going on between Taiwan and China,” notes analyst Rob Enderle.

“So there’s a massive race to move production out of these two countries,” he adds.

Building a semiconductor site takes several years. But once TSMC’s two factories are up and running, “they will be able to satisfy all of America’s demand for the most advanced chips,” said Ronnie Chatterji, deputy director for industrial policy at the National Economic Council.

If Joe Biden is a follower of uninhibited economic patriotism – his initiatives, moreover, make his European allies shiver -, he claims to be addressing the issue differently from his predecessor Donald Trump, who had staked everything on tax cuts.

Brushing off this “waterfall” approach, the Democrat instead relies on massive subsidy schemes to spur private investment.

However, Brian Deese, Joe Biden’s main economic advisor, assured that there are “strong conditions for companies that will benefit from funding”, so that public money is well used in activities that ultimately benefit the American economy.