By David Shepardson
WASHINGTON (Reuters) – U.S. Commerce Secretary Gina Raimondo said on Wednesday that a Chinese invasion of Taiwan and seizure of chipmaker TSMC would be “absolutely devastating” to the U.S. economy.
Asked at a House hearing about the eventual impact, Raimondo said it “would be absolutely devastating,” declining to comment on how or if it will happen, adding: “Right now, the United States buys 92% of its cutting-edge chips from TSMC. in Taiwan”.
Last month, Raimondo announced that the Commerce Department would give TSMC’s U.S. unit a $6.6 billion subsidy for its production of more advanced semiconductors in Phoenix, Arizona, and up to $5 billion in low-cost government loans.
TSMC agreed to expand its planned investment by $25 billion to $65 billion and add a third factory in Arizona by 2030, the Commerce Department said in announcing the preliminary award.
The Taiwanese company will produce the world’s most advanced 2-nanometer technology at its second Arizona factory, which is expected to begin production in 2028, according to the department.
TSMC, the world’s largest contract chipmaker and a major supplier to Apple (NASDAQ:) and Nvidia (NASDAQ:), had previously announced plans to invest $40 billion in Arizona. The firm hopes to begin high-volume production at its first U.S. factory in the first half of 2025, Commerce said.
This is a third party advertisement. It is not an offer or recommendation by Investing.com. Read the regulations here either
remove advertising
.
Congress approved the Chips and Science Act in 2022 to boost domestic semiconductor production with $52.7 billion in research and manufacturing subsidies, with the aim of stopping the United States from depending on Asia for chip production. Legislators also approved a public loan of $75 billion.
A 2023 US government document estimated that a major manufacturing disruption in Taiwan could lead to an increase of up to 59% in the US price of logic chips that domestic producers would have to pay.
(Edited in Spanish by Carlos Serrano)
