Thirty minutes north of Phoenix, in a stretch of desert that used to be home to nothing but cactuses and dry air, over 30 construction cranes are currently building what could be the most strategically important facility on American soil.
Taiwan Semiconductor is spending $165 billion to build six chip manufacturing plants there. And Apple has committed to buying more than 100 million chips from the site this year alone.
Now, why should you care about a construction project in Arizona?
Because this is a company that essentially has no competition at the level that matters most.
Let me explain what TSMC actually does, because "chip maker" doesn't quite capture it.
Every time you use an iPhone, run an AI query, or watch a Netflix show, you're relying on chips that were almost certainly made by TSMC.
Apple designs its chips and TSMC builds them.
Nvidia designs its Blackwell AI processors and TSMC builds those too.
The company is so dominant that when Apple commits to using TSMC's latest manufacturing process, it gives TSMC the confidence to spend billions on the next generation of factories — and then everyone else follows
In other words, TSMC doesn't just make chips - it sets the pace for the entire global technology industry.
The reason the Arizona project exists is worth understanding too. The world's most advanced chips are overwhelmingly manufactured in Taiwan… an island that China has repeatedly threatened to take by force.
And during the Covid pandemic, a global chip shortage meant people couldn't buy new cars. That's how dependent the modern economy is on this one geography.
The U.S. government has spent years trying to fix this, and TSMC's Arizona expansion is the centerpiece of that effort.
Apple is helping pull the whole supply chain with it, pushing its suppliers to use American-made silicon wafers, and buying as much Arizona output as it can.
What makes TSMC genuinely remarkable from an investment standpoint is that the moat around its business grows wider every year. Each new generation of chips requires billions in new factories and years of specialized expertise to perfect.
Meaning that the gap between TSMC and its nearest competitors has widened… not narrowed… over the past decade.
For context: the Arizona facility currently produces chips with transistors at 4 and 5 nanometers. A nanometer is one billionth of a meter so we're talking about structures so small they make a human hair look like a motorway.
TSMC's most advanced Taiwan plants are already at 2 nanometers (with 1.4nm in testing) The technology required to do this doesn't exist off-the-shelf. It takes decades to build, and TSMC has spent those decades building it.
And while I've been watching this story develop for a while, and the Arizona expansion only reinforces what was already true, the global AI buildout runs through TSMC.
Every data center Nvidia is selling… every AI chip Apple is developing… every server Microsoft is deploying — they all need chips that almost nobody else on earth can make
There's geopolitical risk here, and I won't pretend otherwise. But the U.S. government's response to that risk has been to throw enormous resources at keeping TSMC building on American soil.
That's not a complicated investment thesis, and it’s why we featured Taiwan Semicondutor in the updated edition of the AI Stock Investor.
Oliver