Revolutionizing the World of Chips: The Latest Developments in US Manufacturing

TSMC, one of the largest semiconductor manufacturers, has been expanding its operations to the United States as reported in the Wall Street Journal (“TSMC’s U.S. Chip Gambit Has Powerful Backers”). As I previously reported, there is a high concentration of chip manufacturing suppliers in Asia that has created geographic supply chain risks (see “How Secure Are We?”). TSMC’s expansion into the United States has several benefits.

First, having facilities in the United States will allow TSMC to better serve its American customers, who make up a significant portion of its revenue. This will reduce the need to rely on long-distance shipping and other forms of transportation, which have been disrupted during the pandemic.

Second, having facilities in the United States will also provide TSMC with a greater degree of flexibility and control over its supply chain. For example, the company will be able to adjust its production levels and respond to changes in demand more quickly and easily. This will help the company to avoid bottlenecks and other disruptions that can impact its ability to deliver products on time.

Third, having facilities in the United States will also provide TSMC with a more secure supply chain. The United States has a more stable political and economic environment than many other countries, which can reduce the risk of disruptions to the company’s supply chain. Additionally, the United States has a strong legal system that protects intellectual property, which is critical for a company like TSMC that relies heavily on technology and innovation.

Overall, TSMC’s expansion into the United States is likely to reduce the geographic supply chain risk for the company, by providing it with greater access to its American customers, greater flexibility and control over its supply chain, and a more stable and secure environment for its operations.