Samsung and TSMC’s Investments Reshape U.S. Chip Manufacturing Landscape

The recent announcements from Samsung and Taiwan Semiconductor Manufacturing Company (TSMC) regarding significant investments in U.S. chip manufacturing mark a notable turning point for American technology. These strategic moves aim to diversify the production of cutting-edge chips, currently heavily concentrated in Asia, while also securing semiconductor sources within the Americas’ supply chain. Moreover, they serve to strengthen U.S. technological independence.

Over the decades, the U.S. chip manufacturing industry has experienced a steady decline. In the 1990s, the U.S. accounted for over a third of global chip production, but by 2020, this share had dwindled to approximately 12 percent. This decline has raised concerns about the vulnerability of domestic semiconductor manufacturing.

Texas and Arizona stand to benefit the most from these investments.  Samsung’s commitment to invest $40 billion in a new facility in Taylor, Texas, with $6.4 billion supported by U.S. government funding through the CHIPS Act, places them at the forefront of this endeavor. Particularly noteworthy is Samsung’s plan to commence production of the most advanced 2-nanometer chips at this site by 2026, a milestone anticipated two years ahead of TSMC’s projected production in Arizona. This move not only solidifies Samsung’s position in the global market but also greatly expedites the United States’ capability to domestically manufacture state-of-the-art technology.

TSMC, the world’s leading contract chipmaker, is also expanding its U.S. presence with a $65 billion investment in a complex of chip factories in Arizona. Trade tensions and recent disruptions in Asia underline the importance of diversifying chip production, making Arizona an attractive location due to its lower earthquake risk.  These investments are expected to create thousands of direct and indirect jobs while fostering a thriving domestic ecosystem for technological development. However, challenges such as the availability of a skilled workforce and maintaining competitiveness in the rapidly evolving chip industry must be addressed.  The investments by Samsung and TSMC represent a turning point for the U.S. chip industry, strengthening its technology and national security by diversifying leading-edge chip production and fostering domestic innovation. Collaboration between government and industry will be vital in securing a robust and resilient domestic chip supply chain.