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Taiwan Semiconductor Manufacturing Co., the world’s leading maker of advanced computer chips, announced a $40 billion investment in a US manufacturing facility in Phoenix.
President Joe Biden visited the manufacturing site in Phoenix and talked about creating jobs and investing in Arizona, calling TSMC’s commitment “the largest foreign investment in the state’s history.”
“People, American manufacturing is back,” Biden said at the event. “These are the most advanced semiconductor chips on the planet, the ones that power iPhones and MacBooks … this could be a game changer.”
Why it’s a big deal: TSMC makes an estimated 90 percent of the world’s ultra-high-end chips — essential components for nearly every device you interact with on a daily basis, like your car and smartphone, along with a group that probably doesn’t. , like military drones. and missiles
Some of TSMC’s biggest customers include Apple ( AAPL ) and Qualcomm ( QCOM ).
It was already building a factory that was slated to open late next year, but the massive investment will add a second facility that TSMC hopes will come online in 2026.
Why the big push in Phoenix?
The White House is touting the new investments as a direct result of the CHIPS bill that Biden signed this summer. The measure would invest more than $200 billion to encourage companies to bring chip manufacturing back to American soil.
Early in the pandemic, the drive to move manufacturing home gained momentum on both sides of the aisle.
Remember those long wait times for new cars or the crazy prices for used cars? The main reason was a shortage of chips created by the sudden global demand for tools to facilitate remote work and school.
The goal is to ensure that U.S. resources are safe in the event of another disaster, while helping to get American manufacturing back on track.
Of course, it will not be easy.
According to the Wall Street Journal, TSMC is currently struggling with its Phoenix operations. Among them are the relatively higher costs of manufacturing in the United States and the lack of adequately trained personnel.
But a political motivation is also driving Taiwan-based TSMC to deepen ties with the United States. As tensions between Washington and Beijing escalate, the Biden administration has repeatedly reiterated the United States’ commitment to defend the island in the event of a Chinese invasion.
The global airline industry is expected to return to profitability in 2023 after bleeding tens of billions of dollars during the worst of the pandemic. In a forecast released Tuesday, the International Air Transport Association predicted that despite the potential slowdown, airlines will post a combined net profit of $4.7 billion next year.
I guess pushing your customers with unavoidable costs really adds up – good job, everyone.
Debt ceiling debate is this fun little phenomenon that pops up in DC every few years, like a leap year or a meteor shower, where our nation’s elected officials take retail to the next level and the US economy to a new level. They are on the brink of a catastrophic default. Grab some popcorn and get cracking, America.
This week, Goldman Sachs released a report warning that the debt-ceiling battle in 2023 could match 2011’s in disaster — the same one that stripped the U.S. of its top AAA credit rating. And created chaos on Wall Street.
Raising the debt ceiling is “necessary but difficult to achieve,” the bank wrote.
For the uninitiated: The “debt ceiling” is simply the federal government’s borrowing limit. Congress set it up more than a century ago to control borrowing. And historically, it hasn’t been a big deal for lawmakers to agree to raise the limit, because not doing so would be really bad. (Interest rates rise, the stock market crashes, and the U.S. dollar depreciates. Economist Mark Zandi once called it “Financial Armageddon.”)
But for now, Republicans are drawing the battle lines, writes my colleague Matt Egan.
House GOP leader Kevin McCarthy, who is running for speaker, told CNN ahead of the midterm elections that Republicans will demand spending cuts in exchange for lifting the debt ceiling. Sen. John Thune told Bloomberg last week that the debt ceiling could be a way to cut the budget.
Goldman Sachs noted that the political climate next year will have “echoes of 1995 and 2011” — the two most tense standoffs over the debt limit in recent history.
The good news is that we have time for things to get wild. Economists at Jefferies said in a recent research report that the risk of default is unlikely to materialize until “at least” the end of September next year.
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