Biden and Cook have announced plans to start using chips made in the US to take up AI chip Control

US President Joe Biden and Apple CEO Tim Cook have revealed intentions to start utilizing AI chips built in the US after constructing a new processor factory in Phoenix, Arizona, to reduce reliance on China amid the supply chain turbulence. At the TSMC plant in Phoenix, Arizona, Joe Biden, and Tim Cook intend to produce semiconductors.

What are AI Chips: 

• When training and inferring AI algorithms, AI chips are a thousand times faster and more effective than general-purpose CPUs. However, general-purpose CPUs and AI devices both increase speed and efficiency by integrating a large number of small transistors. Because they operate more quickly and use less energy than larger transistors, smaller transistors are preferred. The ability to supply computing power increases with the number of transistors in an AI chip. However, unlike CPUs, AI chips have design elements that have been tuned for AI, accelerating the calculations required by AI algorithms.

President Joe Biden traveled to Arizona to mark the opening of Taiwan Semiconductor Manufacturing Co.'s new factory. With the chip plants, TSMC is constructing there being touted as the greatest foreign direct investment in US history, a $40 billion sum tends to draw the attention of heads of state and corporate chieftains. In addition to the first fab at TSMC Arizona, which will start producing N4 process technology in 2024, the company has also started building a second fab that will produce 3nm process technology in 2026.

Meanwhile, Apple's CEO has said that moving ahead, they will only use chips built at an American TSMC plant. Tim Cook, the CEO of Apple, stated during the event that the company collaborates with TSMC to produce the chips that power all of its products globally. And as TSMC establishes new and stronger roots in America, we look forward to extending this work in the years to come.

After the pandemic produced supply chain issues that resulted in shortages of chips for autos and many other products, Biden has attempted to increase semiconductor output. US semiconductor production accounts for just 12% of the global total, down from 37% two decades ago.

Concerns over Taiwan's over-reliance on the island have been raised in light of Taiwan's leading position as a manufacturer of semiconductors used in technology ranging from cell phones and cars to fighter jets, especially as China increases military pressure to bolster its sovereignty claims.

"Unfortunately, Mr. President, it won't be a game changer," says critics because,

Capacity is not any less significant. 600,000 wafers will be produced annually at TSMC's fabs in Arizona. Although that sounds good, that isn't truly the case. The Taiwanese manufacturer produced over 14.2 million 12-inch wafers packed with chips last year, and it anticipates producing 15.4 million this year. Arizona would only contribute 2.85% of its 21 million yearly global output in 2026 if it maintains the same average capacity growth of 8.1 percent it has achieved over the previous five years. This is not a game-changer.

AI vs China Chip war: 

It will be noted by supporters of this project and the government incentives utilized to acquire these plants that even a little quantity of cutting-edge chip production on domestic soil is preferable to none. While it is somewhat true, it also exposes the US to tensions between China and Taiwan.

All aspects of development, planning, and execution will continue to be done in Taiwan. Those operations would be stopped if Beijing decided to attack, if not permanently. This would deprive TSMC Arizona of all the vital information it requires to operate the meager capacity it has on US territory. Due to the breakneck pace of the semiconductor business, it wouldn't take long for a war 7,000 miles away to threaten thousands of jobs and billions of dollars worth of infrastructure in Arizona.

Conclusion:

TSMC's $40 billion investment may be the greatest foreign direct investment, but that won't be enough to guarantee that the US develops a self-sufficient semiconductor industry. It merely purchases bragging rights.