I am sitting out here in Arizona watching the Semiconductor plants being built. The one we are closest to has been going on for two years now. I am going to guess it is near completion. TSMC Arizona’s first fab is on track to begin production leveraging 4nm technology in first half of 2025.

Upcoming Fab plants:

The second fab will produce the world’s most advanced 2nm process technology with next-generation nanosheet transistors in addition to the previously announced 3nm technology, with production beginning in 2028.

The third fab will produce chips using 2nm or more advanced processes, with production beginning by the end of the decade. Each of the three fabs, like all of TSMC’s advanced fabs, will have cleanroom area approximately double the size of an industry standard logic fab.

The less sophisticated US plants (Motorola) I have been a part of had such rooms also. They also had the beginnings of robotic wiring of chips to boards when I was there. It was interesting at the time in the late seventies, Below a couple C&P FRED charts on US manufacturing and a movement away from China. There is no movement to give China the same technology for the 2NM chips.

Has US-China decoupling energized American manufacturing? FRED Blog

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In recent decades, the US has grown increasingly dependent on imports from China to access a vast variety of goods. The FRED graph above shows Chinese import data: From 1990 through 2016, as China became a globally integrated economy, the US import share from China grew steadily, from close to 2% of aggregate US imports in the late 1980s to close to 22% in 2016.

In recent years, however, policies have been enacted to reduce this dependence on China, as illustrated by the trade war during the Trump administration and the CHIPS and Science Act of 2022. Indeed, the US import share from China has declined from 22% to 14% since 2016.

As the cost of importing Chinese goods has increased, the incentive to produce goods domestically has also increased. So, to what extent is the US-China decoupling leading to a resurgence of American manufacturing? We investigate this question in the FRED graph below, plotting manufacturing investment in structure and equipment, as well as employment and output.

(Click on image to enlarge)

On the one hand, there has been a resurgence of manufacturing investment in structures since 2020. These investments may indicate that American manufacturing overall is indeed resurging, with investments in structures more than doubling in a short period.

On the other hand, output, employment, and investments in equipment haven’t increased in tandem with the growth of investment in structures. We interpret these findings as evidence that American manufacturing  maybe resurging, but that the resurgence may take time.

Investment in structures is time-intensive and precedes the growth of employment and output that results once new manufacturing plants are completed. Jason Dunn and Fernando Leibovici.

Follow the Fred Link for interactive charts.

TSMC Arizona and U.S. Department of Commerce Announce up to US$6.6 Billion in Proposed CHIPS Act Direct Funding, the Company Plans Third Leading-Edge Fab in Phoenix, TSMC

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