Today on the podcast, we're going to be talking about Taiwan Semiconductor Manufacturing Company because they have a new $6.6 billion proposal to invest into the company to create chips here in the United States.
specifically in Arizona. So for those that know, I am based in Arizona. So this is very interesting to me to see what's going on. But I also think from a national perspective with the CHIPS Act and then also internationally as we kind of look at the landscape and the importance of these.
semiconductors for AI and for the entire ecosystem, I think this is a pretty relevant topic. So let's get into it. So the big headline here is that the US Department of Commerce has announced that they are planning to invest $6.6 billion. for a new Taiwan semiconductor manufacturing company facility. And this is actually about... 30% of the funding, I think needed about a third of the funding needed to build this whole facility. So it's actually, you know, a pretty sizable chunk.
The investment, of course, is coming as part of the Chips and Science Act, which was kind of set up to boost domestic semiconductor production, right? That's the whole point of this is they're trying to get this built more in the United States.
And I think there's actually a lot of countries that are working on similar things. I know that... the uae and a lot of other countries right this is kind of important traditionally we've had all of this manufactured in taiwan even china has done a lot of manufacturing of chips but people are kind of on-shoring a lot of this as you know this is a very critical part of the supply chain for technology and in case there's sort of any sort of you know
skirmish between Taiwan and China or China itself. People want to make sure that they're kind of protected from that. So people are starting to, you know, build these fabs in-house. And I actually think this goes so far as to say that... When Sam Altman actually, you know, there's this big headline recently, which a lot of people said was like fake, but it was reported that Sam Altman was trying to raise like $7 trillion. And...
I don't think, I don't know if that's an actual accurate number, but I think regardless, he was trying to raise a ton of money. And what his strategy was is he was going to... different specifically like sovereign wealth funds and different countries so it's actually the government that he was trying to partner with who would put the money in um and then he would
go and get taiwan's semiconductor manufacturing company to build chip fabs specialized for ai um in their country and so he you know he was expecting i think he's seen that the pattern and the trend here that countries want their own fabrications in
house because i mean even for china right like china uh the united states made a bunch of uh tariffs and and trade laws saying that Nvidia couldn't ship certain powerful chips to China, so I would imagine China would want to build more of these in-house and not rely on Nvidia.
There's all sorts of geopolitical issues here, and I think at the end of the day, the answer is for everyone to build in-house. Okay, so with all that out of the way, let's talk about what is currently happening on this $6.6 billion in... um in arizona so the proposed facility right now is going to be they have a greenfield site and it's essentially focused on advanced
uh two nanometer technology for a bunch there's a bunch of different applications but included in this is like computing 5g 6g communications um and they're actually building this from the ground up from scratch a brand new facility for some of this like very advanced cutting edge technology these chips are going to be built for.
This is what's interesting to me. And I think you'll see this as you see these similar. I guess the reason why I think this is important and interesting is because, you know, of course, to me locally in Arizona, this is important. But I think, you know, based off of everything I said with semultimate, we're going to start seeing similar things play.
out in countries all around the world and so i just want to go over some of the downstream effects uh you know we anticipate seeing here you could probably anticipate seeing similar things in other places and also other states as this gets rolled out i would imagine other places in america will have
similar programs Microsoft and Sam Altman are also looking at making some huge data center plays for I think a hundred billion dollars so right now this whole initiative is expected to create around 20,000 jobs during
construction right so i think that's while the whole thing's getting built 20 000 jobs and then once it's up and running that's going to be about 6 000 manufacturing jobs and if you kind of look at um if you kind of look at like jobs from these kind of projects, you could say that like 6,000...
you know, straight up manufacturing jobs exist. And then there's like a runoff of, you know, maybe another 6000 or 12,000 jobs that are created from those 6000 people also having to buy things, right? So when you have these big projects, it's like more than just the people working. facility um it's those their employees spend also kind of i don't know it boosts the local economies in these areas too so
All of this comes as the Biden administration is emphasizing local manufacturing. We saw the same thing from the Trump administration. So this is something that both, I think it seems rather bipartisan right now as the threat of foreign.
adversaries taking over our supply chain is obviously problematic. So I think this is great. We're seeing this from both sides of the political spectrum in the United States. And there is obviously something this obviously was all something brought to light during the COVID. you know, COVID-19 thing where...
We had, you know, China who alluded to holding off medical supplies and, you know, if we didn't play ball. And so I think we actually dropped all the tariffs from Trump's trade war with China. I'm not sure the relation of that, but...
All of that disappeared very quickly and China sent us medical supplies. But I think that was kind of an uncomfortable feeling for anyone to feel like another country had leverage over us on, you know, our most critical supply chains. So it would appear we're trying to... get away from that with
in this kind of tech environment. So the semiconductor sales globally has actually reached $47.6 billion. That's of January this year. This is a huge bump up from last year. And I think that there is a... huge growing demand for these components right obviously with ai and everything happening um just all of this all of the hardware to run this is growing rapidly so um
Of course, we had, you know, statements from the White House praising the TSMC investment in Arizona and saying that this is kind of indicative of a broader trend towards American-made semiconductors.
This is really interesting to me because we saw similar rhetoric from Trump when he was president. So yeah, I think all in all, this is great that this is bipartisan. Makes me really happy. I hate it when different political parties... argue over something that is obviously good but somehow it's you know it got people are picking sides on it and it becomes a partisan issue so i'm really happy we're not doing that with something that is this critical
while the focus i think for all of this has been kind of on encouraging domestic companies right so we have like intel that has so far from the chips act intel has taken a ton of money um right now tsmc is definitely the dominant player in the market as far as these kind of advanced technologies.
Go, I believe they have like 90% specifically of this kind of advanced chip market globally right now. And so obviously like in America, we hear Intel like, oh yeah, that's included in every computer. This is kind of what we think of when we think of...
chips, but TSMC is actually way bigger globally. So I think that it makes a lot of sense to kind of bring them in and start expanding them within the United States. In addition... right i kind of mentioned this earlier but with all of the geopolitical tensions over taiwan's future um you know china claims that it's part of china taiwan says it's independent america is you know has not really taken
I don't know. It goes back and forth, right, with America. I think we, yeah, all sorts of geopolitical politics with Taiwan. And with all of that, people are saying that this could be a major disadvantage or definitely would be if, let's say, China went and took over Taiwan and, you know, blocked its shipments of these chips to the United States. So there's been a bunch.
of high-profile US figures that have made some controversial remarks on this. I mean, I won't speculate on them, but I'm going to tell you what they said. So we had...
We had Massachusetts Congressman Seth Moulton, who said in an event back in May, quote, we should make it very clear to the Chinese, if you invade Taiwan, we will blow up TSMC. I think that one... was pretty controversial and I think he kind of like distanced himself from the comments a little bit later on but you know I think it's just something I bring it up because I think it's something that a lot of people are thinking about like this is obviously you know
TSMC is the 800 pound gorilla in the market right now. And I think that it's a very strategic player. People don't want to see go somewhere else. So what's interesting is in addition to like Apple and Nvidia. being clients of TSMC and getting their chips there. Also, Sony, MediaTek, AMD, Qualcomm, Broadcom, all of these major technology players that we know are getting their chips from TSMC.
you know if tsmc goes down this has major impacts for apple nvidia and everyone else um something that i think was very interesting um was there was uh I think a former Trump national security advisor, Robert O'Brien, recently said, quote, the United States and its allies are never going to let those factories, referring to TSMC, fall into Chinese hands. Some people are saying he's also suggesting what the Massachusetts politician was saying, you know, destroy them and not let them, you know.
not let them get into Chinese hands, because TSMC really is 90% of the world's most advanced chips. So it's like, this is absolutely huge. Beyond all of that, I think that this is a really interesting point right now. It's now Biden's former U.S. Director of National Intelligence, but Averill Haynes also talking about this whole theoretical U.S. invasion or this Chinese invasion said, quote, So that's if, you know, all of TSMC's...
chips were kind of halted and weren't being able to ship everywhere. And let's say China kind of overtook the factory. Okay. So all that to say, it makes a lot of sense why the United States is now investing $6.6 billion into these chip fabs here.
And it's going to be interesting to see how this plays out. I think this new facility, right, that they're trying to get 6.6 billion for is going to take 10 years to build, right? So they want it done within the decade. Could take up to 10 years to build. And I think... this just really underscores a big issue we're seeing similar things out of meta and google who both have announced their own chip kind of
projects and plans where they're going to be manufacturing their own chips. But these facilities take a very long time. And so I think in the meantime, Taiwan Semiconductor Company has a, you know, has a monopoly kind of on this market and you have other players like nvidia who are doing very very well because it's hard to catch up to them with just how difficult it is to to kind of get all of this manufacturing all of this manufacturing facilities built and, you know.
created so I'll keep you up to date on everything else happening but this is a very interesting story for a lot of reasons if you enjoyed the episode today I would super super appreciate it if you could leave me a review on the podcast it helps me to know that I should keep making these podcasts and you know, find great guests and make these in a timely manner. Really appreciate all of you for listening and I'd really appreciate it if you could leave me a review. Hope you have a great day.