Taiwanese chipmaker TSMC said it would more than triple its planned investment at its new Arizona plant to $40 billion, among the largest foreign investments in US history, as President Joe Biden visited and hailed the project.
The expanded investment is a big win for Biden after supply chain issues disrupted the US economy early in his presidency.
"American manufacturing is back, folks," Biden said in a speech against the backdrop of the new factory draped with an American flag and a large banner reading "A Future Made in America Phoenix, AZ."
Mark Liu, chairman of Taiwan Semiconductor Manufacturing Co Ltd, known as TSMC, estimated annual revenue of $10 billion when the two planned chip fabrication plants open.
He added that customers would have annual sales of $40 billion from products using chips made there.
Apple, Nvidia and Advanced Micro Devices, all major TSMC customers, said they expected their chips to be made in the new plants.
"We work with TSMC to manufacture the chips that help power our products all over the world. And we look forward to expanding this work in the years to come as TSMC forms new and deeper roots in America," Apple CEO Tim Cook said.
Also joining Biden at the facility's opening ceremony was TSMC founder Morris Chang, chipmaker Micron Technology CEO Sanjay Mehrotra and Nvidia CEO Jensen Huang, among others.
The plant, scheduled to be operational in 2024, will make a more advanced chip than initially announced.
TSMC, the world's largest contract chipmaker, is a leading supplier to major U.S. hardware manufacturers. Its $40 billion funding for the two facilities is the company's largest investment outside of Taiwan.
"Bringing TSMC's investment to the USs is a masterstroke and a game-changing development for the industry," Nvidia's Huang said in remarks prepared for the event.
TSMC's expanded investment in Arizona is the latest in a string of major investments announced by chipmakers since the CHIPS and Science Act passed this summer.
These include International Business Machines, Micron Technology and Wolfspeed.
TSMC said it would build a second facility nearby to produce so-called "3 nanometer" chips by 2026, the most advanced currently in production.
TSMC also said it was planning to build an industrial water reclamation plant. Chip making is a water-intensive process, and Arizona, which is largely desert, is increasingly struggling with water shortages.
TSMC's Liu said its Phoenix factories are expected to create 13,000 high-tech jobs, including 4,500 under TSMC and the rest filled by suppliers.
Biden has sought to boost semiconductor production after the pandemic caused supply chain problems that led to shortages of chips for vehicles and many other items.
US semiconductor production accounts for just 12% of the global total, down from 37% two decades ago, said a White House report on supply chain problems last year.
Taiwan's dominant position as a maker of chips used in technology from mobile phones and cars to fighter jets has sparked concerns of over-reliance on the island, especially as China ramps up military pressure to assert its sovereignty claims.
China claims Taiwan as its territory but the democratically elected government in Taipei rejects Beijing's sovereignty claims.
The $52.7 billion Chips and Science Act, signed into law by Biden in August, is aimed at preventing a resurgence of supply chain woes.
