Locator: 48527B.
A reader sent me this a few minutes ago. Thank you very much.
There may be a bit of hyperbole in this observation but everyone has to agree it is / was an incredible story.
It allows me to explore a question that continues to haunt me: why did TSMC choose Phoenix?
The Phoenix Business Journal has an article with the headline, "why did TSMC choose Phoenix" but it's behind a paywall. I linked the article when it came out but most couldn't see it due to the paywall.
Knowing that most folks ultimately get around paywalls, I took another look.
AI provided an answer to that question, and it's a hoot. If you don't see the humor, you're not reading closely enough. Every time you ask google AI that very same question, you
will get a slightly different answer but this was the first AI reply I
got:
Yeah, it was the "gridded streets" that sold TSMC on Phoenix. LOL.
But so much more made me laugh. Seriously, read the top three reasons AI provides why TSMC picked Phoenix, and all three answers would have led to northern California, Utah, Texas, or almost anywhere else, other than Phoenix.
The one that jumped out at me: Arizona State University. Among engineering schools, ASU doesn't even make the top 25, much less the top 15, or the top 10, or the top 5. So, TSMC came to Phoenix because that's where Arizona State University was located. Well, yeah, Phoenix also had gridded streets making it easier for students to get to classes without getting lost. Which means they could get to the new TSMC facility without getting lost.
Serious note: I don't have time to get into it but if you do down the TSMC - ASU rabbit hole, one has to agree that ASU was a huge reason why TSMC chose Phoenix. One could write paragraphs comparing engineering schools in the US but it comes down to this: ASU is among the top five engineering schools in the number of engineering degrees that the school awards.That's what TSMC needs: worker bees, not Nobel laureates.
I smirked at the Taipei-Phoenix sister city "thing," but go down that rabbit hole and you will end up where I did: relationships mean a lot in business. And that history -- all the way back to Motorola and Intel, apparently.
There's one more thing that Arizona has -- actually it's something that Arizona does't have -- that is the real answer why TSMC picked Phoenix. There's a clue in the AI response but it's not obvious. I will provide that answer -- what Arizona does not have that clinched the decision.
Break, break.
So, TSMC chose Phoenix.
But why did TSMC even go that route in the first place, to think about moving its operations out of Taiwan to somewhere else.
There were so many reasons for TSMC to move operations -- at least some of their operations -- that the final decision was probably pre-ordained / pre-destined, as they say.
But was there a tipping point? Something that "made" TSMC finally decide. Let's put the "mainland-China-taking-over-Taiwan" argument aside for now.
Wow, I love the blog -- I did not find the answer anywhere -- except on/in the blog.
I track tech here and that's where it was found. Wow, wow, wow. And another wow. It was the number one (#1) advanced chip user in retail electronics. A multi-trillion-dollar company. Apple.
December 3, 2022: TSMC Plans to Make More Advanced Chips in US at Urging of Apple (Bloomberg).
Taiwan Semiconductor Manufacturing Co. will offer advanced 4-nanometer chips when its new $12 billion plant in Arizona opens in 2024, an upgrade from its previous public statements, after US customers such as Apple Inc. pushed the company to do.
Okay, so that's were we are now. But there's more.
How in the world did Tim Cook decide back in 2022 to go this route? Sure, CHIPS Act had just been passed and Tim Cook was playing off China against India but no one thought the US could be chip manufacturing company again. Intel was imploding.
No one, probably not even Trump, was thinking about 200% tariffs on Chinese electronics. When did the US ban high-end Nvidia chips to China? And here's the answer, October, 2022. Tim Cook saw it coming and knew what was at stake. Cook had to have seen this well before 2022 to get TSMC to make a $165-billion "bet-the-farm" decision.
I was simply blown away when I read that Bloomberg headline again that TSMC made its decision to make more advanced chips in the US at the urging of Apple.
Okay, finally back to that earlier question. Name the one thing that Arizona doesn't have that clinched the deal.
A clue. The answer is "related" to the "weather." Not in the way you might think. But going to AI's answer why TSMC chose Phoenix was its "strategic location" (LOL): gridded streets and consistent weather.
"Consistent" was the clue.
If you were to put $165 billion into one city in the US what would be your biggest concern about putting all your eggs into one basket near Stanford, US Berkeley, or San Jose?
Last hint: 1906.
