Part of the issue here is the matter of chip security, in particular for defense chips. There's a growing concern about the security implications of making chip abroad. Not just from a supply standpoint, but also in regards to possible backdoors or kill switches.
One chip maker, the Taiwan Semiconductor Manufacturing Company, better known as TSMC, plays a particularly crucial role producing commercial chips that also have applications for aircraft, satellites, drones and wireless communications. And because of unrest over the past few months in the semiautonomous Chinese territory of Hong Kong, some Pentagon officials and chip executives have wondered about situations that could force suppliers in Taiwan to limit or cut off silicon shipments, the people said.TSMC says it plans to tackle part of the issue with new anti-tamper technology for chips:
Taiwan Semiconductor Manufacturing Corp. Chairman Mark Liu said the company aims to resolve chip security issues by developing new technology to track where chips go and prevent them from being tampered with. He said making chips in the U.S. is not the solution for ensuring security for defense chips.Liu also mentioned that US chip production would be "very difficult" due to cost issues. Production in the US would be more expensive and is not seen as feasible without major government subsidies.