We’ve seen a lot of mirage images that often turn up in news stories about big business plans in the desert. More recently, the plans to unveil a 15-minute City of the Future dubbed Telosa which is the dream project for Billionaire Mark Lore.
But when it comes to bringing in actual jobs rather than a futuristic place to live, has Taiwan solved the problem already?
Apparently, this chip manufacturing plant from the Taiwan Semiconductor Manufacturing Company (TSMC) is likely the real McCoy.
The biggest business push in Phoenix these days isn’t the newest wave in real estate sales all over Maricopa County, nor is it from the recent increase in population that’s flocking to Arizona these days. You don't exactly hear us complaining as we have grown our junk removal business partly on the steady growth in Maricopa county over the last 15 years.
TSMC Chip Fabrication Plant in North Phoenix
The latest news that’s gaining momentum faster than it takes to tabulate Governor voting results is, of course- The Taiwan Semiconductor Factory opening. It’s a story that will mean big business for Phoenix and creates a dynamic manufacturing industry with an edge.
If you don’t know exactly what a Semiconductor is, then you probably aren’t using a device that’s installed into every smartphone, tablet, or computer to read this story. Semiconductor chips are also used in everyday items including microwave ovens, cars, and healthcare devices. These chips run from programs that are stored in massive memory nodules on each chip and help devices run without error.
Semiconductors not only hold massive amounts of memory, but they also include processors that complete tasks that humans cannot do within milliseconds. This also includes chip systems aka (System-on-a-Chip or SOC) that regulates and completes a variety of tasks depending on what the chip is made to do. All of these attributes are what the "TSMC"- Taiwan Semiconductor Manufacturing Company will be doing just north of Phoenix.
Taiwan Semiconductor Manufacturing Company (TSMC) Fab 21, the manufacturing location, is actually no more than 20 minutes by car from Sky Harbor Air Port near downtown Phoenix and is located no more than a couple of kilometers from the Sonoran Foothills off of I-17.
The construction cost is estimated to be $12 billion and covers a plot of land that occupies 1,119 acres. Recent reports are further showing that construction is nearly complete and should be completely operational as a manufacturing plant by early 2024.
There will be at least 2000 employees working directly at the plant and 500 (of which) are local Arizona residents that are currently training for their jobs right now in Taiwan. This stealthy move is estimated to boost the local economy and make Arizona one of the largest foreign investments in US history.
Big business requires lots of support
Sunlit Chemical
This new semiconductor plant is not the only game in town, since support business will be a must to produce the nation's supply of semiconductor chips. Another company "Sunlit Chemical" is currently building a new processing facility in north Phoenix up in Deer Valley. They will be supplying hydrofluoric acid that's essential in manufacturing semiconductors. This facility will be fully functional sometime this year.
But that’s not the end of the story since the materials that further go into manufacturing semiconductors are practically an exact science. It seems that another Taiwan-based company called Taiwan Puritic Corporation has leased spaces in Glendale and Phoenix in recent months. This company is providing raw materials that will be sold to the TSMC plant. Additionally, the company Rinchem Co. will be providing logistic support in Surprise.
Rinchem Co.
It seems that Rinchem Co. is also helping supply special gasses and packaged chemicals for making these chips. They’ve been around for a while in Chandler but now have expanded their business into Surprise. There is further good news for folks in Glendale who will see more business happening with the Kokusai Semiconductor Equipment Corporation. This firm supplies processing systems that are specific for wafer manufacturing.
The Glendale, Arizona office will not only supply spare parts to this new facility but will also serve as a training office space. There are many more outlets and sub-support companies that will eventually serve as logistical support, materials transportation, material acquisitions, and tech support that will all revolve around the TSMC plant. Not to forget that the influx of salaries that are earned will directly go back into the local cities near and around Phoenix.
Cultural Tensions and Differences in US labor policies
Well- yes, the company from Taiwan is potentially making a huge mistake if their new $40 billion manufacturing plant in AZ doesn’t cut the mustard. It’s not hard to imagine that the working conditions in China are very different than those found in the US. Not only that, the spirit of the people in Taiwan is notoriously celebrated for being hard-working and diligent. This is why many of the semiconductor manufacturer plants were moved to Asia.
This pressure to produce an astounding amount of semiconductor chips per year is a scary thought, but there are growing fears that the Arizona-based workers may fail at creating the required percentage of viable chips. And though this could be a cultural difference, this is why 500 of the 2000 Americans who will be working at this new plant are being trained in Taiwan. This is where they will learn a different approach to working principles and time management.
Aside from that, the working methods that many people in Taiwan are used to aren't the same as big factory working conditions here in the USA. It seems that this may have a potential culture clash between workers and foreign upper management. Reminds me of the old flick with Michael Keaton Gung Ho which shows what happens when a Japanese company takes over an American car manufacturing facility.
Exactly how this will translate to the AZ-based crews that will work at the new plant is yet another story.
We're hopeful that this new manufacturing plant will be a great boom for the AZ tech market unless the TSMC corporate heads have other ideas. This would be a first for a new wave of American-made products indeed unless the planning and employee training aren’t well thought out. We’ll certainly be keeping an eye on this groundbreaking effort to see exactly how well it’s evolving and how it’s impacting us in the nearby communities and throughout the county. For more on large productions in Phoenix, check out our KORE Power write-up here.
US Threatens To ‘Blow Up’ Taiwan’s Semiconductor Manufacturing Firm If China Invades The Island; Taipei Unhappy
Taiwan’s Defense Minister, Chiu Kuo-cheng, has responded to US Congressman Seth Moulton’s proposal, stating that the Taiwanese armed forces would not stand for the destruction of any of their facilities.
Congressman Moulton recently suggested that the US should warn China by threatening to target Taiwan Semiconductor Manufacturing Co. (TSMC) if China were to attack Taiwan.
During a conference hosted by the Milken Institute, a California-based think tank, US Congressman Seth Moulton was asked about the potential deterrent impact of US chip policy on China.
In response, Moulton suggested that the US should explicitly warn China that targeting Taiwan could destroy Taiwan Semiconductor Manufacturing Co. (TSMC).
“The US should make it very clear to the Chinese that if you invade Taiwan, we’re going to blow up TSMC,” he said.
The statement made by US Congressman Seth Moulton was promptly challenged by Michele Flournoy, a defense policy advisor, and former government official.
Flournoy highlighted the potential repercussions of destroying TSMC, stating that such an act would result in a significant economic impact of two trillion dollars within the first year and would bring global manufacturing to a halt.
In response to a query from the media before a Legislative Yuan session on May 8, Chiu Kuo-cheng was asked to share his thoughts on Seth Moulton’s statement, reported Liberty Times.
Chiu expressed that anyone advocating for the bombing of any facility in Taiwan, regardless of whether it serves defensive purposes, would violate defense norms.
Chiu Kuo-cheng reiterated that Taiwan’s armed forces safeguard the nation, its citizens, and its resources, materials, and strategic assets.
He emphasized that the armed forces would not tolerate any attempt to destroy such facilities, whether intentional or not.
Invasion Fears
Escalating tensions in the Taiwan Strait have sparked concerns about the potential for a Chinese annexation of the island.
The situation intensified further when Beijing conducted large-scale military drills in response to House Speaker Nancy Pelosi’s visit to Taipei in August 2022.
Beijing has made clear its determination to bring democratic Taiwan under its control, even resorting to force if deemed necessary.
The developments have heightened the sense of urgency surrounding the security of Taiwan and its ongoing struggle to maintain its autonomy.
The United States has been increasingly concerned about Beijing’s potential attempts to acquire Taiwan’s vital chip technology.
There have been suggestions by some former US officials to take extreme measures, such as warning China that TSMC facilities would be destroyed if the island was occupied, as a means of deterrence and preventing Beijing from acquiring Taiwan’s crucial chip production plants.
However, Taiwanese officials have been dismissive of such ideas, and currently, there are no plans to consider such tactics.
For instance, Taiwan’s security chief has allayed these concerns by assuring that Taiwan’s semiconductor industry, which serves as a flagship sector, would not be targeted for destruction in the event of a Chinese invasion.
Meanwhile, in response to American concerns, Taiwan has committed to collaborating with the United States and its allies to prevent China’s military from acquiring advanced chip technologies.
Several countries have actively courted Taiwan Semiconductor Manufacturing Co. (TSMC) to expand its operations within their countries. TSMC, in turn, has made significant investments, amounting to billions of dollars, in establishing a chip fabrication plant in Arizona, USA.
According to the US National Security Council, the potential loss of Taiwan Semiconductor Manufacturing Co. (TSMC) in the event of a Chinese invasion of Taiwan is estimated to have a staggering impact on the global economy, exceeding US$1 trillion.
CHINA-TAIWAN
Experts have pointed out that TSMC represents a complete ecosystem that is highly unlikely to be relocated. Even if Beijing were to occupy TSMC, it would be virtually impossible for them to maintain the chip production capabilities of the company.
TSMC is the leading global contract chip maker with advanced technologies crucial for providing consistent chip supplies worldwide. TSMC relies on state-of-the-art facilities to produce these chips.
Chen Ming-tong, secretary general of Taiwan’s National Security Council, highlighted, “If in the event ASML [the Dutch multinational that provides key supplies to the Taiwanese firm] is unable to sell its lithography systems to TSMC, there is nothing TSMC can do.”
Nevertheless, if the Taiwanese chip sector takes a hit, its consequences on the world economy will be devastating.
