Pelosi meeting with TSMC in Taiwan

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House Speaker Nancy Pelosi (D-Calif.) will meet with the president of Taiwan’s largest semiconductor manufacturer during her visit to the island to demonstrate the importance of computer chips to the US economy and national security.

Pelosi and Taiwan Semiconductor Manufacturing Company (TSMC) chairman Mark Liu will discuss implementation of the recently passed Chips and Science Act, which provides $52 billion in federal subsidies for domestic chip factories, according to people familiar with the matter. who spoke on condition of anonymity to discuss Pelosi’s sensitive schedule.

The meeting, scheduled for Wednesday Taiwan time, comes as TSMC is building a chip factory in Arizona and is considering expanding that project with additional factories in the same location, one of the people said.

The tiny electronic components are the brains that power all modern electronics. They have been in short supply worldwide for almost two years now due to rising demand and a scarcity of expensive factories needed to make the components, prompting countries around the world to rush to build more manufacturing sites.

TSMC is the world’s largest chip manufacturer and an essential supplier to the United States and other western countries. It is by far the largest chip manufacturer in Taiwan, producing more than 90 percent of the world’s most advanced chips, according to the Semiconductor Industry Association.

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The United States uses TSMC-manufactured chips in military equipment, including F-35 fighter jets and Javelin missiles, and in the supercomputers in US national labs, according to one of those familiar with the meeting. Major consumer electronics companies, including Apple, also rely on a variety of TSMC-manufactured semiconductors.

US officials have been alarmed at that confidence in recent years, given China’s belligerent rhetoric against Taiwan, a self-governing democracy that claims Beijing is its territory despite never having ruled it. Those concerns have prompted officials and lawmakers to pressure TSMC to build manufacturing facilities in the United States.

In May 2020, TSMC agreed to build a $12 billion factory in Arizona to produce chips using five-nanometer transistors, a high-tech type of semiconductor used in consumer electronics. By comparison, the average human hair is about 60,000 nanometers thick.

That construction is underway and should be completed by the end of next year, on a plot of land in northern Phoenix that will accommodate several additional factories. TSMC is now considering expanding its plans to build additional factories on the site, said one of those familiar with Pelosi’s planned meeting.

In a June interview, a Taiwanese minister and TSMC board member said the company’s pace of construction at the Phoenix site would depend on the approval of the federal grant bill, which Congress passed last week. President Biden is expected to sign it soon.

One obstacle TSMC faces in Arizona: There aren’t enough trained semiconductor engineers in the area to staff the facility, said minister and board member, Ming-Hsin Kung. That’s why the company has started sending new employees to Taiwan for training, including professionals skilled in other types of engineering, he said.

About 250 have already made the trip for training, including hands-on work at TSMC’s chip factories.

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