The Island That Makes the World's Smartest Chips, and the Arizona Desert That Could Change Everything
Taiwan builds most of the world's most advanced chips, just across a narrow strait from China. Now TSMC's U.S. bet has grown to $265 billion, with talk of a second hub in Texas. We argue bringing chipmaking home is the most important security project of the decade.
By Clara Hughes
Altas World News Opinion Estimated read time: 7 minutes Key takeaways In 2019, Taiwan held about 92% of the world's capacity to make chips at the most advanced level, below 10 nanometers, according to a Semiconductor Industry Association and Boston Consulting Group study [1]. TSMC's planned investment in Arizona has grown to $265 billion, covering 10 chip plants, two advanced packaging plants and a research center, Arizona officials announced in July [2]. Taiwanese media reported last week that TSMC may also plan a second U.S. hub in Texas [3]. In our view, President Trump's mix of tariff pressure and investment deals has done more to bring advanced chipmaking home than any policy in decades. The most important factory you have never seen The phone in your pocket, the computer on your desk and the guidance system in an American missile all depend on tiny chips. The most advanced of them are made mostly in one place: Taiwan. A 2021 study by the Semiconductor Industry Association and Boston Consulting Group found that in 2019, Taiwan held about 92% of global manufacturing capacity for chips below 10 nanometers. South Korea held the other 8% [1]. That is a remarkable concentration of power on one island, just across the Taiwan Strait from mainland China. How America lost its lead It was not always this way. America once led this industry. Yet the U.S. share of global wafer manufacturing fell from 37% in 1990 to less than 10% in 2024, according to the Commerce Department [4]. For decades, Washington let the most strategic industry on Earth drift overseas. We argue that was one of the great policy failures of the post-Cold War era. The Arizona turnaround Now the tide is turning, and fast. Taiwan Semiconductor Manufacturing Co., the world's leading contract chipmaker, first committed $65 billion to Arizona. In March 2025, it announced another $100 billion, Taiwan's Focus Taiwan news agency reported [5]. In July 2026, it added $100 billion more for four additional advance…