In Phoenix, a Taiwanese chip giant builds a hedge against China

Taiwan Semiconductor Manufacturing Company, the world's largest maker of advanced computer chips, plans to unveil an ambitious upgrade at its Arizona plant.

United States Companies and officials have long feared they are overly dependent on Taiwan, which China claims as its own territory, for the world's most advanced computer chips. This is because Taiwan Semiconductor Manufacturing Company, which is the largest maker of advanced chips, is based there.

Now a hedge against this risk is taking shape in - of all places - the most populous city in Arizona.

TSMC plans to present a $40 billion plan on Tuesday to expand and modernize a production center American in Phoenix. At the site, which is buzzing with trucks, cranes and construction workers, the company plans to import advanced manufacturing technology that has been largely limited to its factories in Taiwan.

The improvements could allow the Phoenix factory - TSMC's first major US production site - to eventually produce chips, for Apple's iPhones, capable of performing nearly 17 000 billion specialized calculations per second. TSMC later plans to build a second factory there that will feature even more advanced production technology, targeting future smartphones, computers and other smart devices.

"This announcement of TSMC is historic in every way,” said Ronnie Chatterji, acting deputy director of the National Economic Council and adviser to the Biden administration on chip policy.

The expansion is so significant that an event on Tuesday to celebrate the decision is expected to draw President Biden and Tim Cook, Apple's chief executive, as well as other business and government officials.

Advanced semiconductor fabs, known as "fabs", can manufacture hundreds of fingernail-sized chips on 12-inch silicon wafers. Production requires expensive machinery and complicated, some of which begin t yet to arrive on site in massive crates.

TSMC's new $40 billion estimate for Arizona spending includes the promised $12 billion when announcing the initial plant in 2020. It now says the site will employ 4,500 permanent workers, up from an earlier estimate of 2,000, while creating 21,000 construction jobs.

The updated blueprint is the latest sign of how geopolitical concerns are pushing businesses and governments to shift long-standing strategies, thwarting historic trends that have led businesses move most semiconductor manufacturing to Asia. It also underscores the growing recognition of the importance of microchips and the new technologies to produce them, which add computing power to consumer gadgets, cars and military equipment such as missiles and drones.

< p class="css-at9mc1 evys1bk0" Former President Donald J. Trump and now Biden administration officials have pushed for measures to encourage foreign and domestic chipmakers to build more factories in United States. Democrats and Republicans, swayed by a recent chip shortage, agreed in July to a $52 billion grant package under the Chips and Science Act for larger construction-related spending such factories.

Chipmakers have responded by announcing major factory plans, including by Intel in Ohio, Micron Technology in New York and Samsung Electronics in Texas. But the most coveted producer these days is TSMC, whose founder Morris Chang pioneered the concept of making chips for other companies to design them in 1987.

TSMC is by far the biggest in the world...