Taiwan semiconductor giant to build $12bn plant in Arizona.

Taiwan’s largest company, TSMC said the plant will be able to produce 20,000 semiconductor wafers a month, directly employing more than 1,600 people.

Construction is planned for 2021 with production to begin in 2024The company said the plant was “of critical, strategic importance to a vibrant and competitive US semiconductor ecosystem” and would enable “leading US companies to fabricate their cutting-edge semiconductor products within the US and benefit from the proximity of a world-class semiconductor foundry and ecosystem”.

alks have been underway since last year, and in October TSMC chairman Mark Liu told The New York Times that the project would require major subsidies because it is more expensive to operate a factory in the US than in Taiwan.

The paper reported that the discussions were being driven by the Pentagon’s increased dependence on chips made abroad, especially in Taiwan.

It notes that, from the US point of view, chip factories in Asia are vulnerable to trade disputes and supply chains disruption caused by the coronavirus pandemic.

TSMC was established in 1987 and is now the world’s largest semiconductor foundry. It already has a factory in Camas, Washington state, as well as design centres in Austin, Texas and San Jose, California.