Biden called Arizona fab a “game-changer.” Analyst calls it a “paperweight”

Enlarge / The Taiwan Semiconductor Manufacturing Co. facility under construction in Phoenix, Arizona, US, on Tuesday, Dec. 6, 2022. (credit: Bloomberg / Contributor | Bloomberg)

A new report has revealed that America may be quickly approaching a major roadblock in its bid to become a global chips leader by the end of the decade. Employees of the Taiwan Semiconductor Manufacturing Company (TSMC)—which is leagues ahead of competitors in mass production of advanced chips— told The Information that TSMC has no plans to build a packaging facility in the US.

This likely means that thousands of chips that will eventually be manufactured at a $40 billion fab in Arizona—which is scheduled to be operational in 2025—will ultimately still have to be shipped to Taiwan for packaging. That's a problem, since President Joe Biden introduced the CHIPS and Science Act to reduce US reliance on Taiwan facilities amid China's ongoing threats to invade and possibly take over Taiwan. It would almost seem to defeat the point of building fabs in the US if the US-made chips still ultimately need to be packaged and shipped back from overseas.

TSMC's Arizona fab is a critical part of Biden's plan to design and produce "leading-edge logic chips" that power computers, smartphones, servers, and supercomputers, according to a 2023 report from the National Institute of Standards and Technology (NIST). Construction on the fab has already been delayed, due to what TSMC called a lack of skilled US workers.