Taiwanese chipmakers have launched an unprecedented investment spree of about $120 billion, with 20 new fabs ready or in the pipeline, dwarfing planned investments from the United States and Japan.

According to a report from Nikkei Asia on the 14th, TSMC has just completed four new fabs in southern Taiwan, China. Four more fabs are now being built there to produce cutting-edge 3nm-class products, each of which will cost about $10 billion.

Outside of TSMC, Nikkei research shows that at least 20 new factories are under construction or recently completed across the island, from New Taipei City in northern Taiwan to Kaohsiung in the south. Contractors include UMC and memory chip maker Nanya Technology. The total area of ​​these projects exceeds 2 million square meters.

Nowhere else in the world has chip manufacturing capacity grown like this. TSMC plans to build a factory in Arizona, the United States and plans to build a factory in Kumamoto, Japan, the investment is 12 billion US dollars and 8.6 billion US dollars. Kumamoto is located on the island of Kyushu, about the size of Taiwan.

Data from the Taiwan Semiconductor Industry Association and other sources show that the region already leads the world in chip production, accounting for more than 90 percent of all advanced semiconductor device production capacity, with the rest in South Korea.

Some U.S. policymakers argue that over-reliance on Taiwanese chips creates global supply chain risks. Amid a growing shortage of chips, U.S. President Joe Biden signed an executive order in February 2021 to strengthen U.S. supply chains for semiconductors and other critical industrial inputs.

Since then, the U.S. government has reached out to Taiwanese companies, inviting them to invest in the U.S. and build alternative supply chains. But talks have been slow because the strategic nature of the semiconductor industry makes it difficult to make quick decisions.