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Uncle Sam courting Intel, TSMC to build advanced chip fabs on home soil – report

Aims to head off supply chain issues from dependence on Asian plants

Analysis The US is reportedly in talks with Intel and TSMC to develop new chip factories on home soil due to supply chain concerns as well as the geopolitical threat posed by China.

According to The Wall Street Journal, the Trump administration is also trying to convince Samsung to expand its existing facilities in Texas to encompass more sophisticated silicon.

Intel, for the most part, appears to be the most enthusiastic private sector participant, with Chipzilla CEO Bob Swan reportedly writing to the Department of Defense to say that it is "in the best interest of the United States and Intel" to explore new stateside fabrication facilities.

"We're very serious about this," said Greg Slater, Intel VP of Policy and Technical affairs, adding that any potential facilities would focus on providing advanced silicon to defence and commercial customers.

"We think it's a good opportunity," Slater told the paper. "The timing is better and the demand for this is greater than it has been in the past, even from the commercial side."

Meanwhile, TSMC remained coy, saying it was "evaluating all the suitable locations" but denying the existence of any "concrete plan". The WSJ, however, claims the firm is in talks with Apple, as well as the commerce and defence departments, to create new US-based factories.

For the most part, semiconductor manufacturing has proven fairly resilient to the ongoing trend of outsourcing, with wafers still being produced domestically, despite the growing clout of Asia in this sector.

Intel operates wafer fabrication facilities in three US states: Arizona, Oregon, and New Mexico. This is in addition to sizable manufacturing sites in Israel, Ireland, and China. Further testing and assembly operations are performed within the US, as well as in China, Costa Rica, Malaysia, Vietnam, and the Philippines.

Meanwhile, TSMC – which produces chips for the likes of Qualcomm, Apple, and AMD – has several fabrication facilities in Taiwan, with a handful of others based in the US, China, and Singapore.

Made in Taiwan

The over-reliance of TSMC on Taiwanese factories is a concern to US officials, the report claimed. The Mainland China government regards Taiwan as a renegade province – a byproduct of an unfinished civil war. It is presently only recognised by 14 UN member nations, with all other foreign relations performed through "representative offices" as a consequence of the mainland's "One China Policy".

Although cross-strait relations between Taiwan and the People's Republic of China are relatively cordial, there's always the potential for that to change – particularly if a future administration formally declares independence.

The return of high-tech manufacturing to American shores has long been a priority for the Trump administration, despite the lacklustre results.

In 2017, it dangled generous subsidies and tax breaks under the nose of Taiwanese OEM Foxconn to coax it into building a factory that would employ 13,000 people. Construction, however, remains woefully behind schedule, and the promised jobs have yet to appear.

Separately, Donald Trump has lauded a "new" Apple factory in Texas, which has assembled hardware for Cupertino since 2013, the days of the Obama administration.

There is, therefore, substantial scepticism that any new semiconductor fabs will ever emerge. Even if they do, semiconductor manufacturing is a difficult business, with fabrication facilities both expensive and complicated to build. So it'll be some time before any new US-built chips start entering the wider ecosystem. ®

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