Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
Upside of Inequality Oxford Unintended Consequences

Macro Roundup


Wednesday, July 16, 2025

AI Summary. Nvidia's data center revenue growth is used as a simple extrapolation to project the broader capital-expenditure impact of AI-specific investment on GDP. The aim is not precision but a timely sense of whether the growth contribution from AI capital spending is accelerating or potentially peaking.

Jens Nordvig Money: Inside and Out
Date Posted:

Using Nvidia’s datacenter revenue as a reference for US AI capex, @JensNordvig estimates that AI will make up ~2% of US GDP in 2025 given a standard multiplier, implying an AI contribution to GDP growth of 0.7% in 2025.

Is AI capital spending's contribution to GDP growth still accelerating?

Core argument: The author extrapolates from Nvidia's data center revenue to project the GDP impact of AI-specific capital expenditure, a method used for more than two years.

At the macro level, we have been using Nvidia’s growth trajectory to project the broader CAPEX impact of AI specific investment for more than two years now. We have been using a simple extrapolation from Nvidia’s data center revenue to build a trajectory of the GDP impact. The goal here is not to be particularly precise, but rather to have a timely sense of the trajectory of the impact on AI via CAPEX, and when the growth impact is accelerating (and in the future, potentially peaking).

Takeaways by Macro Roundup® AI

  1. The author extrapolates from Nvidia's data center revenue to project the GDP impact of AI-specific capital expenditure, a method used for more than two years.
  2. The stated aim of the Nvidia-based extrapolation is not precision but a timely read on whether the CAPEX-driven AI growth impact is accelerating or eventually peaking.

Related Articles:

  • SPVs, Credit, and AI Datacenters — Companies funding AI data centers through jointly owned special purpose vehicles keep the borrowing off their own balance sheets while retaining shared control and use of the facilities. AI data center spending already exceeds telecom spending during the dot-com bubble, and weak returns would quickly wipe out the thin equity cushion above the vehicles' debtholders.
  • Microsoft’s Datacenter Freeze – 1.5GW Self-Build Slowdown & Lease Cancellation Misconceptions — Reported cancellations of about 2GW of Microsoft datacenter capacity cover only non-binding letters of intent, while the company holds roughly 5GW of pre-leased capacity under binding contracts slated to begin operating between 2025 and 2028. The authors estimate Microsoft accounted for more than 60% of all newly leased turnkey datacenter capacity over a recent six-quarter stretch.
  • The Alchemists — NVIDIA's share of all US capital spending is projected to approach two 20th-century peaks by 2026, and large cloud providers would need $400–500bn in new revenue to earn their traditional 50% gross margin on roughly $250bn of annual data center spending. After the dot-com collapse, Corning's fiber optic revenues did not surpass 2000 levels until 2018 in nominal terms.

AI Summary. The authors estimate that California's $20 fast food minimum wage, up from $16, raised fast food sector wages roughly 8% relative to the rest of the country while employment fell about 2.7% relative to fast food employment elsewhere in the US. Their median estimate implies 18,000 fewer California fast food jobs than otherwise.

Jeffrey Clemens, Olivia Edwards and Jonathan Meer National Bureau of Economic Research
Date Posted:
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The 2024 rise in CA’s minimum wage in fast food restaurants from $16 to $20 raised the sector’s wages ~8% and lowered its employment by 2 to 4% relative to the US sector overall, with an estimated loss of 18,000 CA fast food jobs. @jeffreypclemens

Did a higher fast food minimum wage reduce fast food employment?

Core argument: Employment in California's fast food sector fell 2.7% relative to the fast food sector elsewhere in the United States from September 2023 through September 2024, in unadjusted Quarterly Census of Employment and Wages data.

We analyze the effect of California's $20 fast food minimum wage [up from $16], which was enacted in September 2023 and went into effect in April 2024, on employment in the fast food sector. We document that AB 1228 increased wages substantially, with a roughly 8% increase in California’s fast food sector relative to the fast food sector elsewhere in the country. In unadjusted data from the Quarterly Census of Employment and Wages, we find that employment in California's fast food sector declined by 2.7% relative to employment in the fast food sector elsewhere in the United States from September 2023 through September 2024. In Figures 1b, 1c, and 1d, for which each series has been indexed relative to September 2023, the magnitude of the relative decline through late 2024 is readily observed from the graphs as being on the order of 2 to 4%. Indexing, detrending, and seasonally adjusting the data make the series more visually comparable but do not substantively alter the relative movements that underlie our regression estimates. Our median estimate translates into a loss of 18,000 jobs in California's fast food sector relative to the counterfactual.

Takeaways by Macro Roundup® AI

  1. Employment in California's fast food sector fell 2.7% relative to the fast food sector elsewhere in the United States from September 2023 through September 2024, in unadjusted Quarterly Census of Employment and Wages data.
  2. California's AB 1228, which raised the fast food minimum wage to $20 from $16 effective April 2024, increased wages in the state's fast food sector by roughly 8% relative to the sector elsewhere in the country.
  3. The median estimate implies a loss of 18,000 jobs in California's fast food sector relative to the counterfactual, with indexed series showing relative declines through late 2024 on the order of 2 to 4%.

Related Articles:

  • The U.S. Low-Wage Structure: A McWage Comparison — Using wage data from most U.S. McDonald's restaurants, the authors find that before the Covid-19 pandemic, differences in entry-level wages across states were strongly related to state minimum wages, with real wages rising only in the roughly half of states raising their minimums. The 2021 wage spike nearly eliminated those geographic differences and left the federal minimum wage near-irrelevant.
  • Do Minimum Wages Reduce Job Opportunities for Blacks? — The authors find evidence that higher minimum wages reduce employment among low-skill Black workers across every group examined — teens, high school dropouts, and young workers with at most a high school education — with larger effects for Black males, while such effects are not very detectable for whites.
  • Why Do Labor Unions Advocate for Minimum Wage Increases? — Using variation in U.S. state minimum wages, the authors estimate that each $1 increase predicts a 5% (0.3 percentage point) rise in the likelihood of union membership among people ages 16–40. Membership declines among the minimum wage's most direct beneficiaries, consistent with free-riding, while gains occur among broader groups not directly affected.

AI Summary. Most US trading partners have not retaliated against sweeping US tariffs, with only China and Canada hitting back at a minimum 10% global tariff, 50% levies on steel and aluminium, and 25% on autos. US customs duty revenues reached a record $64bn in the second quarter, $47bn more than a year earlier.

Peter Foster, Amy Borrett, Andy Bounds and Ilya Gridneff Financial Times
Date Posted:
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Other than China and Canada, America’s trading partners have largely avoided retaliation against US tariffs, allowing Trump to raise almost $50B in excess customs revenues without a significant impact on US exports.

Have trading partners retaliated against sweeping US tariffs?

Core argument: US customs duty revenues hit a record $64bn in the second quarter, $47bn more than the same period a year earlier, according to data published by the US Treasury.

America’s trading partners have largely failed to retaliate against Donald Trump’s sweeping tariffs, allowing a president taunted for “always chickening out” to raise nearly $50bn in extra customs revenues at little cost. Four months since Trump fired the opening salvo of his trade war, only China and Canada have dared to hit back at Washington imposing a minimum 10% global tariff, 50% levies on steel and aluminium, and 25% on autos. At the same time US revenues from customs duties hit a record high of $64bn in the second quarter — $47bn more than over the same period last year, according to data published by the US Treasury on Friday. China’s retaliatory tariffs on American imports, the most sustained and significant of any country, have not had the same effect, with overall income from custom duties only 1.9% higher in May 2025 than the year before. Combined with limited retaliation from Canada, which has yet to release second-quarter customs data, the duties imposed on American exports worldwide represent a tiny fraction of the US revenue during the same period.

Takeaways by Macro Roundup® AI

  1. US customs duty revenues hit a record $64bn in the second quarter, $47bn more than the same period a year earlier, according to data published by the US Treasury.
  2. Only China and Canada have retaliated four months into Trump's trade war, which imposed a minimum 10% global tariff, 50% levies on steel and aluminium, and 25% on autos.
  3. China's overall customs duty income was only 1.9% higher in May 2025 than a year earlier, and duties imposed on American exports worldwide represent a tiny fraction of US revenue over the same period.

Related Articles:

  • Are Businesses Absorbing the Tariffs or Passing them on to Their Customers? — About three-quarters of manufacturing and service firms facing tariff-driven cost increases reported passing at least some of those costs to customers through higher prices, while roughly a quarter of each said they absorbed the full increase without raising prices. Nearly a third of manufacturers and about 45% of service firms reported full pass-through.
  • US Tariff Receipts Surge in Donald Trump’s Trade War — US tariff revenues rose almost fourfold from a year earlier to a record $24.2bn in a month, equal to about 14.5% of the typical $166bn monthly federal budget shortfall. The Yale Budget Lab projects current tariff policy would raise $2.2tn over 2025–2034, or $1.8tn net of lost revenue elsewhere.
  • The US Trade Deficit and Foreign Borrowing — The authors argue US trade deficits persist because foreign investors find US financial assets attractive, but the current deficit level is not sustainable. They estimate that stabilizing the US net foreign liability position requires improving the trade balance by about 2% of GDP, or over 3% if low-cost borrowing privileges are lost.

AI Summary. Core goods inflation, which excludes food and energy and is where tariffs would show up most clearly, is running at its highest rate in more than a decade outside the post-pandemic spike, after having been negative for many years before that spike. Its contribution to overall inflation remains small but is trending upward.

John Authers Bloomberg
Date Posted:

A recent rise in core goods prices, which historically have fallen over time, could be driven by the pricing-in of tariffs. The current uptick in prices is the highest in more than a decade, outside of the 2021–2023 spike.

Is core goods inflation trending upward again?

Core argument: Core goods inflation, excluding food and energy, is running at its highest rate in more than a decade outside of the post-pandemic spike, after having been negative for many years before that spike.

Tariffs would raise their ugly head most obviously in core goods, excluding food and energy. Reviewing how much this sector contributed to overall inflation, we can say that the problem is still nothing serious, but also that the trend is plainly going in the wrong direction. Core goods inflation had been negative for many years before the post-pandemic spike. Its current rate is the highest in more than a decade, outside of that spike.

Takeaways by Macro Roundup® AI

  1. Core goods inflation, excluding food and energy, is running at its highest rate in more than a decade outside of the post-pandemic spike, after having been negative for many years before that spike.
  2. Tariffs would show up most obviously in core goods, a sector whose contribution to overall inflation remains nothing serious for now but is trending in the wrong direction.

Related Articles:

  • U.S. Inflation Still Robust Even Before Tariff Impact — U.S. consumer price inflation has run at a 2.3% annualized rate, close to the pre-pandemic average of 2.1%, but personal consumption price and hourly pay data suggest underlying inflation is stuck 1–1.5 percentage points above its pre-pandemic pace. Producer price data for manufactured goods point to upside inflation risk from higher input costs.
  • Are Businesses Absorbing the Tariffs or Passing Them on to Their Customers? — About three-quarters of manufacturing and service firms facing tariff-driven cost increases reported passing at least some of those costs to customers through higher prices, while roughly a quarter of each said they absorbed the full increase without raising prices. Nearly a third of manufacturers and about 45% of service firms reported full pass-through.
  • State of U.S. Tariffs: July 7, 2025 — The authors estimate US tariffs leave consumers facing an average effective tariff rate of 17.6%, the highest since 1934, or 16.5% after consumption shifts to cheaper goods. They project the tariffs reduce US real GDP growth by 0.7pp, leave the economy persistently 0.4% smaller (about $110bn annually), and raise $2.2tn over a decade after dynamic effects.

AI Summary. A stronger renminbi would erode Chinese manufacturers' competitiveness at a time when Beijing depends on them for employment and output, because that competitiveness and China's weak household consumption stem from the same transfers. In the short term a rising currency could cut export demand faster than domestic demand rises, risking job losses, falling industrial profits, and financial stress.

Michael Pettis China Financial Markets
Date Posted:

Pettis argues China is unlikely to revalue the renminbi in the short term as a stronger renminbi would risk reducing export demand more rapidly than household wealth gains would increase domestic demand.

Pettis argues China is unlikely to revalue the renminbi in the short term as a stronger renminbi would risk reducing export...

Why is it hard for China to let its currency strengthen?

Core argument: China's manufacturing competitiveness and its very weak domestic consumption are flip sides of the same transfers, so raising the household share of GDP is equivalent to undermining that manufacturing competitiveness.

A stronger renminbi becomes a problem—it would erode the competitiveness of Chinese manufacturers just as Beijing has become more dependent on them for employment and economic activity. The critical point that analysts often miss is that China’s global manufacturing competitiveness and its very weak domestic consumption are not separate characteristics of the Chinese economy. Each is the flip side of the other—Chinese manufacturing competitiveness is the result of the same transfers that result in China’s very low household share of GDP, so that raising the latter is the same as undermining the former. And while it would boost the role of domestic consumption in absorbing Chinese production, the risk is that at first a rising currency would reduce export demand more quickly than it increases domestic demand, mainly because the shift from export demand to domestic demand would require that factories retooled and redirected the goods they produced, something that could take years to complete. The result in the short term could be job losses, falling industrial profits, and renewed financial stress—particularly in heavily indebted manufacturing provinces.

Takeaways by Macro Roundup® AI

  1. China's manufacturing competitiveness and its very weak domestic consumption are flip sides of the same transfers, so raising the household share of GDP is equivalent to undermining that manufacturing competitiveness.
  2. A stronger renminbi would erode the competitiveness of Chinese manufacturers just as Beijing has grown more dependent on them for employment and economic activity.
  3. A rising renminbi risks reducing export demand faster than it raises domestic demand, since retooling and redirecting factory output could take years, with possible short-term job losses, falling industrial profits, and renewed financial stress in heavily indebted manufacturing provinces.

Related Articles:

  • China Emerges From Trade Chaos With Record Exports, Surplus — China posted a record half-year trade surplus of about $586bn, with exports up 5.8% year-over-year to $325bn and imports up 1.1%. Shipments to the US fell 16.1% from a year earlier, while exports to the 10 Southeast Asian nations in the Asean group rose 17%.
  • Why China’s White-and Blue-Collar Workers Are Worried About Losing Their Shirts — Chinese workers across industries, age groups, and income brackets report fear of layoffs, shrinking wages, and few alternative job options. China's urban unemployment rate was 5%, below the government's 5.5% official target, while joblessness among those aged 16 to 24 excluding students was 14.9%, up from 14.2% a year earlier.
  • China Chooses Deflation — China's headline consumer price inflation has fallen below zero and core inflation is little better, and the author argues US tariffs will hasten this deflationary dynamic. Because easing monetary policy would weaken the Yuan against the Dollar, China is accepting deflation instead, which the author argues means rising real interest rates.

Thursday, July 17, 2025

AI Summary. The average rich-country government runs a fiscal deficit above 4% of GDP, well above the norm of the 1990s and 2000s, alongside large off-balance-sheet contingent liabilities that in the US exceed 5x GDP. With governments backstopping so much of the economy, recessions have become infrequent.

Economist Staff The Economist
Date Posted:
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“Many countries now have vast ‘contingent liabilities’ – off-balance-sheet commitments that nonetheless represent an enormous potential outlay.” The U.S. government “is on the hook for contingent liabilities worth more than 5X the country’s GDP.”

Are large government deficits and backstops making recessions rare?

Core argument: The average rich-country government runs a fiscal deficit of over 4% of GDP, far above the norm in the 1990s and 2000s, with politicians spending big even absent bad news.

Even when there is no bad news, politicians spend big just to be sure. The average rich-country government now runs a fiscal deficit of over 4% of GDP, far above the norm in the 1990s and 2000s. Their support goes beyond budget deficits, which are simple to measure. Many countries now have vast “contingent liabilities”—off-balance-sheet commitments that nonetheless represent an enormous potential outlay. America’s federal government is on the hook for contingent liabilities worth more than five times the country’s GDP. When the feds are backstopping the entire economy, it is hardly surprising that recessions are few and far between.

Takeaways by Macro Roundup® AI

  1. The average rich-country government runs a fiscal deficit of over 4% of GDP, far above the norm in the 1990s and 2000s, with politicians spending big even absent bad news.
  2. The American federal government carries contingent liabilities—off-balance-sheet commitments representing an enormous potential outlay—worth more than five times the country's GDP.
  3. With the federal government backstopping the entire economy, recessions are few and far between.

Related Articles:

  • The World Is Getting Riskier. Americans Don’t Want to Pay for It — Americans' resistance to paying to insure against risks from illness, old age, and natural and financial disasters is growing alongside those risks; JPMorgan estimated wildfires around Los Angeles caused $50bn in losses, of which only $20bn were insured. Socializing risk removes the price signal that encourages the insured to mitigate their own exposure.

AI Summary. Monthly core goods inflation — a category making up about 25% of the core consumer price index basket — ran roughly 80 basis points above its typical seasonal level, which the author attributes to tariffs. The author argues this effect will keep building as pre-tariff inventories are depleted and transshipments are curbed.

Robin Brooks Robin Brooks Substack
Date Posted:

“Monthly core goods inflation in June 2025 was ~80bps above where it normally is at this time of year.” Robin Brooks notes that as pre-tariff inventories are depleted and the administration cracks down on transshipments, goods prices will rise.

Are tariffs beginning to push core goods inflation above normal?

Core argument: Monthly core goods inflation in June 2025 ran about 80 basis points above its normal level for that time of year, compared with 2023, 2024, and the median monthly path across 2000–2019.

The tariff inflation shock looks like it really got going in [this weeks] CPI data for June. The top left chart shows monthly inflation for core goods, a category that makes up about 25% of the core CPI basket. The chart shows monthly inflation so far in 2025 (purple line), along with monthly inflation rates in 2024 (blue line) and 2023 (red line) as well as the median inflation rate throughout the calendar year for 20 years of data from 2000 to 2019. Monthly core goods inflation in June 2025 was around 80 bps above where it normally is at this time of year, which is substantial. This effect will keep building in intensity as pre-tariff inventories are depleted and as the administration cracks down on transshipments, as in the trade deal with Vietnam.

Takeaways by Macro Roundup® AI

  1. Monthly core goods inflation in June 2025 ran about 80 basis points above its normal level for that time of year, compared with 2023, 2024, and the median monthly path across 2000–2019.
  2. Core goods, the category showing the June 2025 inflation jump, makes up roughly 25% of the core CPI basket.
  3. The tariff inflation effect is expected to keep building in intensity as pre-tariff inventories are depleted and as the administration cracks down on transshipments, as in the trade deal with Vietnam.

Related Articles:

  • How China Gets Around US Tariffs — China's exports to Indonesia, Malaysia, Thailand and Vietnam hit record highs while its imports from them stayed subdued, which the author reads as evidence of transshipment to circumvent US tariffs. The author argues that as long as US demand stays strong, Chinese goods will reach the US, and decoupling would require curbing domestic demand.
  • Vietnam Trade Deal Takes Aim at Back Door for Chinese Goods — A US trade deal with Vietnam applies a 40% tariff to goods transshipped through Vietnam, twice the 20% rate on regular Vietnamese imports. The US goods trade deficit with Vietnam has grown to more than $120bn, behind only China and Mexico, while Vietnam's imports from China rose 28% and its exports to the US rose 26% year over year.
  • China Emerges From Trade Chaos With Record Exports, Surplus — China posted a record half-year trade surplus of about $586bn, with exports up 5.8% year-over-year to $325bn and imports up 1.1%. Shipments to the US fell 16.1% from a year earlier, while exports to the 10 Southeast Asian nations in the Asean group rose 17%.

AI Summary. The estimated population of predominantly rural European Union regions fell by nearly 8mn, or 8.3%, over a decade while urban population rose by more than 10mn, or 6%. Regions covering about 40% of the EU's land area and holding almost one-third of its population are seeing sustained resident declines.

Valentina Romei and Barney Jopson Financial Times
Date Posted:

Between 2014 and 2024, rural areas in the EU lost 8.3% of its population due to falling birth rates and internal migration. The OECD warns this “creates political discontent.”

Are Europe's rural regions losing population while cities grow?

Core argument: The estimated population of predominantly rural EU regions fell by nearly 8mn in the decade to 2024, a drop of 8.3%, while the urban population rose by over 10mn, or 6%.

In the decade to 2024, the estimated number of people living in predominantly rural EU regions fell by nearly 8mn, an 8.3% drop, while the urban population rose by over 10mn, or 6%. Regions making up about 40% of the EU’s land area and containing almost one-third of its population, are experiencing a sustained drop in residents. This is not simply a concern for those left behind in the emptying rural communities, says Lamia Kamal-Chaoui, director at the OECD’s Centre for Regions and Cities. Depopulation threatens Europe’s cultural heritage, local languages, cuisines, crafts, farmland, traditions and even national security. It carries a wider cost to society, generating “a geography of discontent, which in turn creates political discontent, social discontent, putting our democracy in danger”, says Kamal-Chaoui.

Takeaways by Macro Roundup® AI

  1. The estimated population of predominantly rural EU regions fell by nearly 8mn in the decade to 2024, a drop of 8.3%, while the urban population rose by over 10mn, or 6%.
  2. Regions covering about 40% of the EU's land area and holding almost one-third of its population are experiencing a sustained decline in residents.
  3. Lamia Kamal-Chaoui, director at the OECD's Centre for Regions and Cities, says depopulation threatens Europe's cultural heritage, local languages, cuisines, crafts, farmland, traditions and national security, and generates "a geography of discontent" that puts democracy in danger.

Related Articles:

  • Italy’s Exodus of Young Talent Worsens Population Squeeze — Italy's official statistics agency reports that nearly 191,000 people left the country in a year, the highest in 25 years, with the share of emigrants holding at least a college degree rising from one in three a decade earlier to half. Italy's working-age population is forecast to fall another 5mn by 2040.
  • The Economic and Political Dynamics of Rural America — Population growth in the average rural US county reached 0.4% and surpassed that of the average urban county, while the share of rural counties losing population fell from two-thirds in 2012 to under half. The growth is concentrated in rural counties near major urban centers and in recreation and retirement destinations.
  • Germany Joins EU’s ‘Ultra-Low’ Fertility Club — Germany's fertility rate fell to 1.35 children per woman, below the United Nations' "ultra-low" threshold of 1.4, a level at which falling birth rates become difficult to reverse. Estonia and Austria also dropped below 1.4, joining nine European Union countries including Spain, Greece, and Italy, while France's rate fell to a record-low 1.67 and Finland's to 1.26.

AI Summary. TSMC says it is accelerating construction of its second and third Arizona plants by several quarters to meet strong U.S. customer demand for smartphone and AI computing chips. The company has committed an additional $100bn to build five more facilities in the state and expects around 30% of its 2-nanometer and more advanced capacity to be located in Arizona.

Cheng Ting-Fang and Lauly Li Nikkei Asia
Date Posted:

TSMC will attempt to accelerate construction of its second and third Arizona plants to meet American demand; the plants will enable TSMC to manufacture ~30% of its most advanced chips in Arizona.

Is US demand for AI chips accelerating advanced chip manufacturing onshore?

Core argument: TSMC is accelerating construction of its second and third Arizona plants by "several quarters" to meet demand from U.S.-based customers for smartphone and AI computing chips.

TSMC. says it is speeding up construction of its second and third plants in Arizona "by several quarters" to meet robust demand from U.S.-based customers for smartphone and AI computing chips. The world's largest contract chipmaker committed earlier this year to an additional $100 billion investment to build five more facilities in the state, including two chip packaging plants and the industry’s most advanced chip production of 2-nanometers and better. "After completion, around 30% of our 2-nanometer and more advanced [chip] capacity will be located in Arizona, creating an independent, leading-edge semiconductor manufacturing cluster in the U.S.,” TSMC Chairman and CEO C.C. Wei told investors and reporters in an earnings conference on Thursday.

Takeaways by Macro Roundup® AI

  1. TSMC is accelerating construction of its second and third Arizona plants by "several quarters" to meet demand from U.S.-based customers for smartphone and AI computing chips.
  2. TSMC committed an additional $100 billion to build five more Arizona facilities, including two chip packaging plants and production of 2-nanometer and more advanced chips.
  3. TSMC Chairman and CEO C.C. Wei said around 30% of the company's 2-nanometer and more advanced chip capacity will be located in Arizona after completion, creating an independent, leading-edge semiconductor manufacturing cluster in the U.S.

Related Articles:

  • TSMC’s Arizona Chip Production Yields Surpass Taiwan’s in Win for US Push — Taiwan Semiconductor Manufacturing Co. reports that the share of usable chips produced at its Phoenix, Arizona plant is about 4 percentage points higher than at comparable factories in Taiwan. Yield is a critical industry measure because it determines whether companies can cover the enormous costs of a chip plant.
  • The Chips Act Has Been Surprisingly Successful So Far — The US government has spent over half of its $39bn in Chips Act semiconductor incentives, and chip companies and supply chain partners have announced $327bn of investments over the next 10 years, according to Semiconductor Industry Association calculations. US data show a 15-fold increase in construction of computing and electronics manufacturing facilities.