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TSMC ups its Arizona chipmaking investment to $40 billion ahead of Biden’s visit

HSINCHU, TAIWAN - SEPTEMBER 16: Taiwan Semiconductor Manufacturing Company, Limited (TSMC), the world's most valuable semiconductor company at Hsinchu Science Park on September 16, 2022 in Hsinchu, Taiwan. Taiwan's semiconductor manufacturing capabilities are crucial to global supply chains, with megacap companies like Apple, Nvidia and Qualcomm heavily dependent on the island's exports. Taiwan accounts for some 60 percent of global semiconductor foundry revenue, according to media reports. (Photo by Annabelle Chih/Getty Images)

(CNN) — Taiwan Semiconductor Manufacturing Company is upping its investment in the United States, announcing Tuesday that it’s building a second semiconductor factory in Arizona and raising its investment there from $12 billion to $40 billion. The move marks one of the “largest foreign direct investments in the history of the United States,” according to the company.

TSMC’s plans come as tensions between Washington and Beijing are rising over chips, with President Joe Biden imposing a sweeping set of controls on the sale of advanced chips and chip-making equipment to Chinese firms.

Biden visited the manufacturer’s site in Phoenix and speak about bringing jobs and investment to the state. Other lawmakers and business leaders also attended the event, including Apple CEO Tim Cook.

“As many of you know, we work with TSMC to manufacture the chips that help power our products all over the world, and we look forward to expanding this work in the years to come as TSMC forms new and deeper roots in America,” Cook said during the event, adding that with the opening of the new facility, Apple’s own Silicon chips “can be proudly stamped ‘Made in America.’”

TSMC previously announced that it was building a $12 billion facility in Arizona that will eventually manufacture 3-nanometer chips, TSMC’s most advanced technology. Between the two factories, thousands of “high-paying high-tech jobs” will be added to the state and 600,000 wafers per year will be produced, the company said.

TSMC accounts for an estimated 90% of the world’s super-advanced computer chips, supplying tech giants including Apple and Qualcomm.

Chips are an indispensable part of everything from smartphones to washing machines — but are also difficult to make because of the high cost of development and the level of knowledge required, meaning much of the production is concentrated among a handful of suppliers.

The White House is touting the new investments as a direct result of Biden’s economic plan, including the $200 billion CHIPS and Science Act. Biden has been visiting communities where companies like TSMC and Intel have announced new investments since the passage of the law this summer.

“It means more workers in these major factories, but it also means more opportunities for suppliers and contractors, good paying construction jobs, opportunities for small and medium sized manufacturers and suppliers,” National Economic Council Director Brian Deese told reporters in a call on Monday. “It means economic opportunity for communities that have often been left behind in economic cycles, including traditional energy communities that have powered our nation for generations and tribal nations.”

The global chip shortage first surfaced at the beginning of the pandemic, which upended supply chains and changed consumer shopping patterns. Automakers cut back on their orders for chips while tech companies, whose products were boosted by lockdown living, snapped up as many as they could.

The facility Biden will visit Tuesday in Phoenix is slated to begin producing chips in 2024. The new facility should start production in 2026.

— CNN’s Nikki Carvajal, Wayne Chang and Diksha Madhok contributed to this report.