The deal with Samsung comes a week after the government announced a $6.6 billion subsidy for Taiwan Semiconductor Manufacturing Co., or TSMC, to expand its operations in Arizona. The payments are part of the 2022 CHIPS Act, which includes $39 billion in subsidies to encourage American and foreign companies to build in the United States. So far, the government has allocated about $23 billion of that money to a handful of companies.
“The entire chain, from R&D to packaging, is concentrated in a few Asian locations and it’s incredibly disruptive to the American supply chain. It’s unsustainable,” Commerce Secretary Gina Raimondo said in a call with reporters before the announcement. I said. Now we’re making the investments that will allow America to lead the world once again.
Although American companies such as Intel and Nvidia design many of the most advanced computer chips, they are largely made in a small handful of facilities in Taiwan and South Korea. TSMC makes the majority of the world’s most advanced chips in Taiwan, raising concerns that the United States could be cut off from a technology if China invades or expands its influence on the island. Which has become important to every industry, as well as the US military.
The boom in artificial intelligence, which calls for sophisticated chips to train and run AI algorithms, has added urgency to calls from industry and national security leaders to expand U.S. chipmaking capacity. What is the increase?
Building sophisticated computer chips, which are many times smaller than a human red blood cell, is a fiendishly difficult task. A single chip factory, called a “fab,” can take a decade and $20 billion to build. In Taiwan, they run 24 hours a day, monitored by highly skilled engineers in dust- and static-free “clean rooms.”
American companies moved production overseas decades ago, seeking lower labor costs in a highly competitive industry. But as Asian companies developed ever more advanced manufacturing techniques, America lagged behind. TSMC executives have complained that American workers and engineers are not prepared to build and operate such a difficult manufacturing process.
The Samsung deal includes about $40 million in job training, and the government expects the project to create 17,000 construction jobs and 4,500 manufacturing positions over the next five years, according to a Commerce Department press release.