Pelosi meeting with TSMC in Taiwan

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House Speaker Nancy Pelosi (D-California) will meet the chairman of Taiwan’s largest semiconductor maker during her visit to the island, a sign of the importance of computer chips to the economy and the national security of the United States.

Pelosi and Taiwan Semiconductor Manufacturing Company (TSMC) President Mark Liu will discuss the implementation of the recently passed Chips and Science Act, which provides $52 billion in federal subsidies for national chip factories, according to people familiar with the matter, who spoke on condition of anonymity to discuss Pelosi’s sensitive schedule.

The meeting, scheduled for Wednesday Taiwan time, comes as TSMC builds a chip factory in Arizona and plans to expand that project to include additional factories at the same site, one of the people said.

Tiny electronic components are the brains that power all modern electronic devices. They have been in short supply around the world for nearly two years due to rising demand and a scarcity of expensive factories needed to manufacture the components, prompting countries around the world to scramble to build more manufacturing sites. .

TSMC is the world’s largest chipmaker and a key supplier to the United States and other Western countries. It is by far the largest of Taiwan’s chipmakers, which together produce more than 90% of the world’s most advanced chips, according to the Semiconductor Industry Association.

Taiwan official calls for approval of US computer chip subsidies

The United States uses chips made by TSMC in military equipment, including F-35 fighter jets and Javelin missiles, and in supercomputers at US national laboratories, according to one of the people familiar with the meeting. Major consumer electronics companies, including Apple, also rely on a variety of semiconductors made by TSMC.

U.S. officials have been alarmed by this reliance in recent years given China’s belligerent rhetoric toward Taiwan, a self-governing democracy that Beijing claims as its territory despite never having ruled it. These concerns have prompted officials and lawmakers to pressure TSMC to build manufacturing facilities in the United States.

In May 2020, TSMC agreed to build a $12 billion factory in Arizona to produce chips with five-nanometer transistors, a type of high-tech semiconductor used in consumer electronics. For comparison, the average human hair is about 60,000 nanometers thick.

This construction is underway and should be completed by the end of next year, on land north of Phoenix that can accommodate several additional factories. TSMC is now considering expanding plans to build additional factories on the site, one of the people familiar with Pelosi’s planned meeting said.

In an interview in June, a Taiwanese cabinet minister and TSMC board member said the pace of the company’s construction at the Phoenix site would depend on the passage of the federal subsidy law, which Congress approved last week. President Biden is expected to sign it shortly.

One hurdle TSMC faces in Arizona: There aren’t enough trained semiconductor engineers in the region to staff the facility, said minister and board member Ming-Hsin Kung . The company has therefore started sending new employees to Taiwan for training, including qualified professionals in other types of engineering, he said.

Around 250 have already made the trip for training, including hands-on work at TSMC’s chip factories.

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