Why the CHIPS Act Will Fail
Don’t expect microprocessors to grow in the Arizona desert
With Senator Mark Kelly at his hip, President Joe Biden flew to Arizona in December to commemorate the latest investment by the Taiwan Semiconductor Manufacturing Company (TSMC) in the Grand Canyon State. Standing at the site of a Phoenix plant that will produce wafers for the company’s namesake technology, the president shook hands with TSMC chairman Mark Liu and founder Morris Chang, declaring in his signature style that American manufacturing “is back, folks.”
TSMC is the world’s undisputed champion in the production of the leading-edge logic chips that power the modern world. Its contract foundry business model — you send them a design, they make it — has enabled it to outpace all rivals in the ability to produce custom chips at scale for everything from consumer electronics to cars to telecommunications kits to fighter jets. TSMC’s Taiwan plants (“fabs,” in industry lingo) churn out an astonishing 90 percent of the world’s most advanced processor chips.
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Jordan McGillis is a Paulson Policy Analyst at the Manhattan Institute. Clay Robinson is a graduate student at Arizona State University’s Thunderbird School of Global Management.
Photo by Sam Yeh/AFP via Getty Images