TSMC has long had a chip factory in Arizona. Last month, the company announced plans to locate a second manufacturing facility in Arizona. The investment is therefore not unexpected, says Verhagen. “The Chip Act, a US subsidy for this industry, and the growing destabilization between China and the US play a role here.”
With the Chip law and science The US government is providing more than $50 billion in grants to build new chip factories and semiconductor research and development. The law was signed last summer.
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The factories of TSMC, maker of chips for Apple’s iPhone, will be located near Phoenix in the US state of Arizona. China won’t be happy with Taiwanese investment, Verhagen thinks. “They must have seen it coming, but the decision may have been made sooner than expected. But they can’t help but accept it because a ferocious counter-reaction would not be to their advantage.’
Europe in pieces
China is heavily dependent on foreign trade and will still have to trade with the US. On the other hand, the Taiwanese decision places the European Union in a difficult package. “European dependence on chips from China is declining and the US is also a more stable partner than China, but it faces Europe with a strategic dilemma.”
Europe’s dependence on China remains as great as ever, Verhagen says. Germany still sells more cars to China than to America. And the Netherlands sells a lot of chip machines from ASML to China and now it’s getting more difficult. But China’s share of ASML’s revenue is so large that it can’t be covered simply by moving trade to Arizona.’
That’s good news for the state of Arizona, Verhagen says. ‘Tens of thousands of jobs are being created, but the question is how sustainable all of this is. Making chips requires a lot of raw materials and a lot of water. But Arizona is mostly desert.”