Chip maker launches $5 billion investment in US

Chip maker launches $5 billion investment in US

A Taiwan chip company has announced a $5 billion investment in the US this week, and another is planning to establish a research center in the Midwest. The back-to- back announcements may help allay concerns among American politicians and business leaders that the country is relying too much on Taiwan for the production of semiconductors.

GlobalWafers Co. plans to build a plant that will be the biggest of its kind on American soil, with construction expected later this year. A chip designer, MediaTek Inc., a rival to Qualcomm Inc., said on Tuesday it will create a research center in partnership with Purdue University in Indiana.

With the global chips shortage and ongoing geopolitical concerns, GlobalWafers is taking this opportunity to address the United States semiconductor supply chain resiliency issue by building an advanced node, state-of-the-art 300 millimeter silicon wafer factory, GlobalWafers Chairwoman and Chief Executive Officer Doris Hsu said in a statement on Monday. Hsu told Taiwan media that 80% of its production capacity has been booked at the Texas plant.

US Commerce Secretary Gina Raimondo said that Taiwan's dependence puts her country in a fragile situation. Eric Schmidt, the former Google chief this month, expressed concerns that it is a national security risk for America to rely on Taiwan and other Asian countries for the majority of its chip supply. Russia's attack on Ukraine has heightened these worries, as some see the war increasing the chances that China will try to invade Taiwan.

GlobalWafers and MediaTek are following the footsteps of Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, which is building a $12 billion plant in Arizona to diversify its production capacity and satisfy Washington s demand for chips for national security use.

Even after TSMC announced its plans for the Arizona plant, US officials and business leaders continued to warn that it is too risky for the world s chip production in Taiwan. They have ramped up their rhetoric in recent months as part of their campaign to get lawmakers to approve $52 billion in federal grants to aid domestic manufacturing.

China sees self-governing, democratic Taiwan as part of its own territory, and hasn't ruled out taking the island through force. A senior Chinese economist at a government-run research group called for authorities to seize TSMC if the US hits China with sanctions on par with those against Russia.

Taiwan hasn't addressed exactly what it might do with chip supply if China invades the island, but Taiwanese officials have tried to assure Washington that the island will be a stable supply chain partner to the US.

Taiwan is the US's most important partner when it comes to democratic values and industry development, said a Minister of National Development Council Kung Ming-hsin, at an event hosted by the Global Taiwan Institute in Washington, D.C. on Monday. He said that the two sides can deepen partnerships in chip design and research and development capabilities.

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