TSMC's US Factory Shows the Limits of Reshoring and Tariffs

Arthur T Knackerbracket has processed the following story:

A new examination of Apple partner TSMC's Arizona facility shines a spotlight on how the U.S. bet on domestic chipmaking is colliding with labor shortages, cost overruns, and global dependencies.

Just outside Phoenix, a sleek, high-security facility is taking shape. Known as Fab 21, the site is operated by Taiwan Semiconductor Manufacturing Company (TSMC) and will soon be one of the most advanced chipmaking facilities in the world.

The microscopic transistors produced here will power Apple devices, artificial intelligence systems and critical infrastructure, representing a significant shift of advanced technology manufacturing to American soil.

TSMC currently makes about 90% of the world's most advanced semiconductors, nearly all of them in Taiwan. That long-standing reliance is now being reexamined amid global supply disruptions and rising tensions in the Asia-Pacific.

[...] TSMC replicated much of its Taiwan production environment in Arizona, but the complexity of the process means the US still relies heavily on foreign equipment, materials and expertise.

[...] Officially, Taiwan's government supports TSMC's global expansion. Privately, there is concern. Taiwan's dominance in semiconductors, sometimes called the "Silicon Shield," is seen as critical leverage in deterring Chinese aggression.

Moving high-end production overseas may reduce that leverage and undermine the island's geopolitical relevance.

Some in Taipei have warned against letting the US or other allies "hollow out" Taiwan's tech advantage. Others view diversification as necessary insurance against supply chain shocks or military threats.

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