Unprecedented demand exists for semiconductor chips, fueled by 5G smartphones, modern vehicles, next-generation video game consoles, cloud computing and artificial intelligence systems. Geopolitical risks and rivalries involving China and Taiwan threaten Taiwan’s chipmaker TSMC.
These factors have led to a chip shortage and changes to the global semiconductor supply chain that involve construction of massive new chip factories in the U.S. In response to these factors, TSMC is establishing a $12 billion chip fabrication plant in Arizona. South Korea’s Samsung Electronics Co. is set to follow, with construction of a $10 billion chip manufacturing facility in Austin, Texas.
The “CHIPS for America Act” introduced to Congress last year aims to encourage the establishment of more U.S. plants. U.S. Rep. Michael McCaul, a Texas Republican, plans to reintroduce the bipartisan bill this year with a view to securing $25 billion in federal funds and tax incentives. McCaul said in a statement he’s working with colleagues in the House and Senate “to prioritize getting the remaining provisions of CHIPS signed into law as quickly as possible.”