Apple CEO Tim Cook, President Joe Biden to Help TSMC Unveil $40 Bn US Chip Buildout

Apple CEO Tim Cook and AMD CEO Lisa Su will join President Joe Biden at an Arizona event for Taiwan Semiconductor Manufacturing Co.

TSMC is the world’s go-to supplier for chips powering everything from smartphones to electric vehicles. (AP)

Apple Inc. Chief Executive Officer Tim Cook and Advanced Micro Devices Inc. CEO Lisa Su will join President Joe Biden on Tuesday at an Arizona event for Taiwan Semiconductor Manufacturing Co., where the chipmaker will announce plans to bolster its investment in the state to $40 billion and construct a second production facility.

Cook, Su and Biden will be at the site of a $12 billion plant in Phoenix that TSMC is already building, a showcase in the administration's efforts to encourage companies to bring more chip manufacturing to the US and prevent a repeat of the supply disruptions over the last two years that cost companies hundreds of billions in sales.

TSMC ramped up its plans after major customers, including Apple, urged the Taiwanese chipmaker to build more advanced semiconductors in the US, Bloomberg News reported. Cook has told employees his company plans to source chips from the Arizona plant under construction.

TSMC's expanded plans and Cook's appearance, previously reported by Bloomberg, amount to a victory lap for Biden in a state crucial to an expected reelection bid in 2024. Carrying Arizona helped him win the presidency in 2020 and Democrats there won narrow elections for governor and a US Senate seat in November's midterm elections.

Biden in August signed into law the Chips and Science Act, offering $50 billion in incentives for companies to produce semiconductors in the US. TSMC is likely to receive billions in subsidies. The president has touted his efforts to boost US chip manufacturing in visits to facilities across the country.

National Economic Council Director Brian Deese told reporters Monday that both Apple and AMD “will be sourcing significant chips from TSMC's Arizona facility,” and that the second TSMC site will begin construction in the coming year with production slated to begin in 2026.

“We're really seeing the success of this long-term strategy that both US companies and global companies are making the decision to invest and expand here,” said Deese.

When the two plants are up and running, they will eventually produce more than 600,000 wafers annually. That volume is about 4% of TSMC's total global output in 2021.

The president is expected to be joined at the event, intended to celebrate a key construction milestone at the Phoenix site, by Commerce Secretary Gina Raimondo and TSMC executives, including founder Morris Chang, Chairman Mark Liu and Chief Executive Officer C.C. Wei. Nvidia Corp. chief Jensen Huang is also slated to attend.

The plant will make advanced 4-nanometer chips when it comes online in 2024 and the second facility will make even more sophisticated 3-nanometer chips. However, when TSMC begins to make 3-nanometer chips in the US in 2026, its technology in Arizona will still lag at least one generation behind what's available in Taiwan.

TSMC is the world's go-to supplier for chips powering everything from smartphones to electric vehicles, and most of its production is still centered in Taiwan.

China's threats to Taiwan have raised concerns about the world's heavy reliance on that region for supplies of semiconductors.

TSMC's customers have pressed the company to roll out its latest technologies simultaneously in the US and Taiwan, Bloomberg News reported, which would help fulfill a Biden administration goal of having the most cutting-edge chips in the world produced on US soil. But Taiwanese and company officials have said they intend to keep the latest technology at home.

In addition to the over 10,000 construction workers who helped with construction of the site, TSMC Arizona's two fabrication plants are expected to create an additional 10,000 high-paying high-tech jobs, including 4,500 direct TSMC jobs.