Taiwan Semiconductor Manufacturing Company, Limited

TSMC $12B Chip Plant in Arizona — Biggest Onshoring in U.S. history

Under Secretary Krach discusses Taiwan Semiconductor Manufacturing Company’s decision to build a new $12 Billion chip manufacturing plant in Arizona in this May 2020 interview with Bloomberg’s Kevin Cirilli.

Kevin Cirilli: Just within the last couple of hours, bipartisan legislation was introduced in the Senate in response to China carrying and proposing forward some controversial new measures as it relates to Hong Kong. President Trump, this afternoon, declined to comment publicly so far on these measures, but this proposal in Congress would issue sanctions to businesses and individuals in China should they cooperate with it. Can you give us an update or any comment at all in response to what we’re seeing with regards coming from Beijing to Hong Kong? 

Secretary Krach: Kevin Cirilli, thank you so much for having me back on your program. It’s deeply concerning to the United States. Hong Kong is a great friend to us and we are monitoring this situation closely. So we’re going to see it as it develops. 

Kevin Cirilli: Meanwhile, your team has just announced, within the last couple of days, that 12 billion dollars worth of investment coming from the Taiwan Semiconductor Manufacturing Corporation, a $12 billion dollar investment in the state of Arizona. What does this do for Silicon Valley? What does this do for the semiconductor industry? 

Secretary Krach: Yes. And this was part of our 5G trifecta announcement that we made on Friday. It’s an absolute game changer. Not only is it the biggest onshoring in U.S. history, but it is critical to national security. TSMC plays a very critical role in terms of the semiconductor business and they’re going to be bringing their entire supply chain with them. It bolsters American national security and our economic prosperity. So with that, it will create thousands of American jobs. And TSMC is high tech chips. It’s a five nanometer plant. It’s the state of the art. It will impact daily lives for people around the world and it will make made in America once again. You know, Silicon Valley, the semiconductor was invented in the United States and it brings it back. And the deal also strengthens our relationship with Taiwan, a vibrant democracy, a force for good in the world, and a real good friend of the United States, just like Hong Kong. 

Kevin Cirilli: You know, you and I have talked about this before, Mr. Under Secretary. Just about how the State Department is working in the longer term to try to develop international standards on a host of different sectors as it relates to financial services, to energy and to 5G. And this is just the latest illustration of that. But can you talk more broadly about the U.S. foreign policy goals in the long term and developing those international standards with Europe, with Taiwan, with Hong Kong? 

Secretary Krach: Yes. And this is this is part of our Economic Prosperity Network initiative. And what that is, it’s comprised of countries, like minded countries, companies, civil society that operate under a set of trust principles. And those trust principles we would call, in the United States, American values… In Europe, democratic values… But more translated globaly, trust principles. And those are basic things like integrity, accountability, respect for rule of law, respect for sovereignty of nations, respect for property of all kinds. Respect for the planet. Respect for human rights. Respect for the planet. Transparency. All of those things. And the Economic Prosperity Network encompasses all areas of economic collaboration. Commerce, trade. Investment, energy. Digital infrastructure, health care, supply chain of education, research. 

Kevin Cirilli: Well, I want to talk about those supply chains, because as you as you look at its $12 billion investment in Arizona as part of the Taiwan agreement, you talk also about diversifying and disentangling some of the U.S. interests from China. How important is that? I mean, just the other day and last just the other day, literally, there was more bipartisan legislation coming from Congress that would require those Chinese companies that are traded publicly on U.S. exchanges to be able to be subjected to the same type of regulations on the exchanges as other countries’ firms and as U.S. firms. 

Secretary Krach: Yes. And I think what you are seeing in Congress is a reflection of what citizens here the U.S. are seeing. And actually, citizens around the world and I think people are waking up to the fact of Communist Party three pronged strategy of concealment, co-option and coercion. So the pandemic is a result of concealment of the virus. Co-option is entanglement of the supply chains and then you see with China’s so-called face mask diplomacy is really seduction and coercion in terms of, hey, we want you to do these things. You know, we’ll aid you with the PPC. And countries are seeing that, citizens are seeing that, and they don’t like it. And with that, that’s giving the political will to government officials all over the world. 

Kevin Cirilli: And just two more questions for you. Just when you talk to leaders in Silicon Valley about these issues, what do you hear from them? 

Secretary Krach: Well, they you know, I hosted Secretary Pompeo out in Silicon Valley for four days. We met with many of the top leaders out there. And, you know, one of the things that I said to him after spending 30 years in Silicon Valley and knowing all these guys is, we always used to say corporate responsibility is social responsibility. Well, it’s also global economic security, because just as the threat to democracy is real and urgent, so is the threat to your businesses, because it seems like the battleground between democracy and malign regimes is the technological battlefield. And they know it, because they’ve had their intellectual property stolen. They’ve been coerced in terms of handing over proprietary technology. So they feel it. And they’re right along, I think, with businesses all over the U.S. and actually all over the world. 

Kevin Cirilli: And this is really a nonpartisan issue, it sounds like. 

Secretary Krach: By the way, it’s a totally nonpartisan issue. I think it’s the most unifying issue, whether it’s in Congress, Democrats or Republicans. You can see it. And, you know, and I think everybody has woken up and said, look, we can’t look at our rose… You know, look through rose colored glasses, as Secretary Pompeo, would say. We have to treat them, not how we hope they would be, but how they are. 

Kevin Cirilli: And just one final question. A lot of reports about the inspector general. Has that impacted in any way your ability, sir, to conduct your conduct? Your ability to do your job? 

Secretary Krach: None whatsoever.