Asian investment fuels US manufacturing revival. | So Good News
A Taiwanese meat processing giant is doubling down on a sprawling plant it’s building north of Phoenix, adding to a wave of Asian investment that is boosting jobs in a resurgent U.S. manufacturing sector.
Taiwan Semiconductor Manufacturing Company (TSMC), Apple’s exclusive chipmaker, is aiming to make silicon chips using its advanced 5-nanometer manufacturing process on a 1,129-acre site in Arizona. TSMC founder Morris Chang said at a press conference on Nov. 21 that the company is working on plans for a second manufacturing facility that will be able to churn out 3-nanometer chips faster.
TSMC’s campus, scheduled to open in 2024, is expected to create 1,900 high-tech jobs and support thousands more for suppliers and vendors. Bloomberg reported this month that Apple is ready to source chips for its devices from an Arizona plant, reducing its reliance on TSMC’s factories in Taiwan.
The first phase of the giant plant, announced in 2020, will cost $12 billion, and the expansion will add billions in investment by the world’s most valuable semiconductor company. TSMC’s bet on the Grand Canyon State is that a combination of government incentives and global supply chain risks — such as the possibility of a Chinese invasion of Taiwan — could shift manufacturing jobs to the United States.
Foreign companies play a key role in this trend. Foreign direct investment (FDI) will create a record high of more than 129,000 manufacturing jobs in the United States by 2022, according to the activist group Reshoring Initiative. Remanufacturing—the process of remanufacturing goods from overseas—is on track to create an additional 219,000 jobs this year, for a total of nearly 350,000 new jobs.
Rising FDI and recovery are helping to reverse the long-term decline in manufacturing. Automation and manufacturing decreased in the United States from a peak of 19.6 million in June 1979 to 12.9 million in October 2022. Manufacturing has added about 1.5 million jobs since March 2010. According to the Reshoring Initiative; Employment by the end of 2021 is about 6 million more jobs than projected before the Great Recession.
Battery Boom creates jobs.
Most of the manufacturing jobs created and reinvested by FDI are in high-tech products where the US has a trade deficit. In the past few years, A flurry of actual or planned investment in semiconductors and electric vehicle (EV) batteries has driven job growth. The push to localize the EV battery supply chain has turned the Midwest and Southeast into a hub of large investments in the sector.
Ford is from Kentucky. Construction began last year on a $5.8 billion EV battery plant in Glendale and it partnered with South Korea’s SK On in the largest of those deals. This summer, Kansas, Japan’s Panasonic has revealed it is spending $4 billion to build a battery factory in DeSoto. Ohio State Japan’s Honda and South Korea’s LG said last month that their joint venture is building a $3.5 billion battery plant near Jeffersonville.
Vietnamese automaker VinFast, a unit of the country’s largest conglomerate Vingroup, plans to build a $4 billion EV plant in North Carolina’s Chatham County, marking the state’s first auto plant and its largest economic development project. The company has begun work on a giant facility outside Raleigh and Durham that will assemble electric cars and buses and produce EV batteries.
A Chinese company is also taking action. Gotion Inc., the US subsidiary of the China-linked battery maker. announced in early October that it was investing $2.36 billion to build a battery component manufacturing plant in Big Rapids, Michigan. While major Chinese investments in U.S. technology sectors often trigger federal national security reviews, there is no evidence that the Gotion deal has attracted official scrutiny.
Based on public announcements, these five investments in EV battery manufacturing across the Midwest and Southeast are slated to bring a total of more than 21,000 jobs. Most of these actions were announced before the August release of the Inflation Reduction Act, which provides $369 billion in renewable energy incentives and consumer tax credits for electric vehicles designed to boost domestic battery production.
Incentives for Chipmaking
Recovery initiatives argue that government efforts are critical in driving resurgent growth. for example, The CHIPS Act, signed into law in Aug. Nearly $53 billion will be spent on research and development. In an analysis published in July, Harry Moser, president of the Reshoring Initiative, argued that while the funds are not yet forthcoming, the proposed bill is already spurring new investment from the industry.
Moser cited TSMC’s chip factory in Arizona and South Korea’s Samsung in November last year, citing a planned $17 billion semiconductor plant near Austin, Texas. Samsung has begun exploring the possibility of building 11 more chip factories in Texas worth a combined $191 billion.
A lot of investment in chipmaking is a good thing. “In a few years, there will be a glut of chips since many factories around the world have been announced,” the Reshoring Initiative noted in an August report. “The U.S. could potentially go from relying on China and Taiwan for chips to relying on China to buy our expensive chips to assemble into information systems, medical devices and servers that will be shipped to us.”
According to the organization’s data, South Korea Vietnam and Japan are reportedly leading the wave of job announcements this year as source countries for FDI. for example, South Korea is projected to be the source of more than 35,000 new US manufacturing jobs by 2022, primarily due to large investments in EV battery production.
Vietnam is expected to create more than 22,000 jobs, while Japan will have more than 14,000 jobs. China Canada, India and Taiwan Germany Along with the Netherlands and France, it is in the top 10 for job creation.