U.S. Commerce Secretary Gina Raimondo said Taiwan's TSMC (TSMC), the world's largest contract chip manufacturer, has begun producing cutting-edge 4 nanometer (4nm) semiconductors in the United States.
The development comes as Washington pushes for domestic chip manufacturing and TSMC seeks to diversify its business amid China's growing military threat to Taiwan.
“For the first time in our country's history, leading-edge four-nanometer wafers are being produced on American soil by American workers at volumes and quality comparable to Taiwan,” Raimondo told Reuters in an interview.
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Raimondo said TSMC's Arizona factory has started production in recent weeks.
“This is a big deal — it's never been done before, never been done in our history. A lot of people said it couldn't happen,” Raimondo said of the previously undisclosed start of production.
The ability to make chips domestically has been a key goal of outgoing U.S. President Joe Biden's administration, especially amid a fierce technology war with China.
The United States currently does not produce any leading chips. But Raimondo hopes that by 2030, the United States will be able to produce 20% of the world's cutting-edge logic chips.
Meanwhile, Raimondo's Commerce Department has been promoting key U.S. policies aimed at cutting off China's access to cutting-edge chip and chip manufacturing technology.
Industry experts say U.S. sanctions Make China 10-15 years behind the West in the field of wafer manufacturing.
China says 'supply chains at risk'
China's state-run newspaper Global Times responded to Raimondo's comments say on sunday This development could lead to “extremely adverse consequences”.
Citing an earlier editorial, the newspaper said the United States “is using cunning methods to force our Taiwanese businesses… to relocate to the United States.”
Beijing claims democratically-ruled Taiwan as its own territory. It did not rule out using force to control the island. These threats have been at the core of U.S. efforts to secure its chip supply chain, and, It also prompted TSMC to diversify its operations outside the island.
The Global Times also claimed that the shift from “Asia's efficient ecosystem” to the United States (where chip production costs remain high due to “high labor costs and fragmented supply chains”) could push up global chip prices.
“This move is far from a natural evolution of the market. It threatens to disrupt global supply chains that are carefully shaped by market dynamics,” the Beijing mouthpiece said.
It added: “The United States' selfish desire to strengthen its domestic chip industry … comes at the expense of Taiwan's semiconductor industry and the broader global supply chain.”
Taiwan's trump card
Concerns about TSMC moving production off island Also grew up in Taiwanchip manufacturers are regarded as “holy mountains that protect the country.”
TSMC plays a vital role in Taiwan's export-reliant economy, especially since it faces little competition.
However, expanding production in the United States could be crucial for TSMC as President-elect Trump returns to the White House next week.
Trump accuses Taiwan of stealing U.S. chip business, says The island needs to pay defense costs to the United States.
The incoming US president also harshly criticized the Biden administration's CHIPS Act, under which the Commerce Department finalized Allocates $6.6 billion to TSMC’s U.S. subsidiary For semiconductor production in Phoenix, Arizona.
The Commerce Department award to TSMC also includes up to $5 billion in low-cost government loans.
Producing advanced chips in the United States could give Taiwan and TSMC leeway to take a more favorable stance once Trump becomes president.
TSMC will produce the world's most advanced dual-nanometer technology at its second factory in Arizona, with production expected to begin in 2028.
TSMC also agreed to use its most advanced chip manufacturing technology “A16” in Arizona.
- Vishakha Saxena, Reuters
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