In American history, it ranks among the biggest foreign investments.

President Joe Biden and the leader of the Taiwan-based company opened the Arizona factory as the news was made.

Plans to bring onshore manufacture of crucial components for everything from phones to military jets are being advanced by the Biden administration.

The leading manufacturer of microchips for other businesses, including Apple, is TSMC.

It will manufacture 3-nm and 4-nm semiconductors for iPhone CPUs at its Arizona facilities. The “brains” of electronics like cellphones, auto parts, and artificial intelligence (AI) systems are commonly referred to as semiconductors.

The first of the two semiconductor manufacturing facilities, according to TSMC Chairman Mark Liu, is scheduled to open in 2024. About $40 billion will be invested overall. The corporation has never made a larger investment outside of Taiwan.

Following supply chain disruptions that caused chip shortages and rising tensions between the US and China, the investment is a boost for Mr. Biden.

The initial agreement for TSMC to construct a facility in the US was made in 2020, under President Donald Trump’s administration. With the most recent disclosure, that investment’s size has significantly increased.

Even though we dominate the world in research and design for new chip technology, we are now only producing around 10% of the world’s chips, Mr. Biden noted during a speech in Phoenix on Tuesday.

Before the jobs moved overseas, the US used to produce more than 30% of the world’s computer chips, he claimed.

If we maintain our focus, the United States will be in a better position than any other country to dominate the global economy in the coming years, he continued.

Several executives from technology firms like Nvidia and Advanced Micro Devices that depend on TSMC production were present at the opening event.

Tim Cook, the CEO of Apple, called it a significant occasion.

As TSMC establishes new and stronger roots in America, he added, “We look forward to expanding this effort in the years to ahead.

Analysts believe that TSMC’s investment could revolutionise the sector.

According to Wedbush analyst Dan Ives, “The TSMC investment is a significant step for US chip investment over the next decade.” “This is a significant strategic move by TSMC, and it marks the beginning of a real chip production war between the US and China.”

A law committing $280 billion (£232 billion) to high-tech manufacturing and scientific research was signed by President Biden in August amid worries that China was gaining a technological edge over the US. Tax incentives are included in the investments for businesses constructing computer chip manufacturing facilities in the US.

The action was taken when ties between the two nations deteriorated.

Beijing’s assertions regarding Taiwan’s independence and its growing assertiveness in Asia have fueled this. Taiwan is seen by Beijing as a piece of its territory that must be united with the mainland, possibly using force. The mainland is not what Taiwan considers to be the case.

In response, the US has put restrictions on who can access cutting-edge chip technology.

That has hurt China’s export-driven economy, which makes and sells everything from electric cars to phones using the technology.

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