Derek Au on TSMC's Arizona semiconductor factories

Despite significant delays and cost overruns at TSMC’s Arizona plants, the company invested $65 billion during the Biden years and pledged another $100 billion after Trump took office. Derek Au, keen technology observer and investor, writes: 

Were it not for the punitive actions of the US [threat of tariffs], there is simply no advantage for the TSMC to build in the US.  The CHIPS Act subsidy is just a mild sweetener.  If you listen carefully to the announcement at the White House, Trump doesn’t even try to hide it.  He says he strong armed the Chairman [C.C. Wei].  If we believe in comparative advantage there are none for building advanced fabs in the US.  The operating costs are much higher, salaries are higher and there is no domestic talent.  There is also no local supplier chain. Everything has to be imported.  In Arizona they are saying the area around the fab is becoming Little Taipei.  Ethnic restaurants and grocery stores are springing up to cater to the new workers from abroad.  I’ve read that operating US chip plants would lower operating margins for the entire TSMC.  But they have no choice, because Trump is going after not only TSMC but its customers to force a realignment of the supply chain.

Derek recently visited a TSMC factory in northern Phoenix:

The place is pretty massive.  I drove around the front of the fab and all of the people in the employee lots walking towards the building were Asians.  The non-Asians that I saw had construction vests and looked like contractors, construction workers… 

~ Derek Au, as quoted in "Mercantilism in America," The Coffee Can Portfolio, May 6, 2025