Computer chip giant TSMC is to more than triple its investment in a giant US plant to US$40bn in one of the largest foreign investments in American history in what Apple Inc (NASDAQ:AAPL) chief executive Tim Cook called a "significant moment".
The announcement came as President Joe Biden and the Taiwan-based firm's boss opened the factory in Arizona.
The Biden administration is pushing ahead with plans to bring onshore production of key components in everything from phones to military jets.
TSMC is the world's largest maker of micro chips for other companies, with clients including Apple.
"We look forward to expanding this work in the years to come as TSMC forms new and deeper roots in America," Apple's Cook said.
The Arizona plants will produce 3-nm and 4-nm chips used for iPhone processors.
Mark Liu, TSMC's chairman, said the firm would build two semiconductor fabrication plants with the first one expected to be online by 2024 in the largest investment made by the company outside of Taiwan.
The investment is a boost for Biden following supply chain disruption that has led to chip shortages and amid growing tensions between the US and China.
Analysts see TSMC's investment as a potential game changer in the industry.
"The TSMC investment is a significant step for US chip investment over the next decade," according to Wedbush analyst Dan Ives.
"This kicks off a legitimate battle between the US and China on chip production with this being a monumental strategic move by TSMC."