The founder of the Taiwan Semiconductor Manufacturing Corporation, Morris Chang, says geopolitics is having profound effects on the semiconductor industry.

Speaking at an event in Phoenix Arizona, where his firm was debuting an ambitious $40 billion upgrade and expansion of its new manufacturing facility in the state, he explained the new constraints being placed on the sector by the changing geopolitical scene.

Speaking of the new facility, which is TSMC’s first advanced chip plant built in the United States in over two decades, Chang said there remained a lot of hard work ahead, if it was to be a success.

The upgrades for the facility will enable the phoenix plant to manufacture the chips for Apple’s iPhone, which can perform almost 17 trillion specialized calculations per second. TMSC is planning an even newer facility in the state which will house even more advanced production technology, capable of producing the microchips for future smartphones, computers, and other smart electronics.

In an interview with Nikkei Asia at the event, Chang likened the plant to the first plant TSMC ever built in the US, in 1995 in Carnas, Washington.

Chang said, “Twenty-seven years have passed and [the semiconductor industry] witnessed a big change in the world, a big geopolitical situation change in the world. Globalization is almost dead and free trade is almost dead. A lot of people still wish they would come back, but I don’t think they will be back.”

His interview came as tensions are rising between Beijing and Washington over several issues, from the independence of Taiwan, to restrictions on technology transfers being implemented by Washington, designed to restrict China’s access to advanced microprocessor technology, especially as related to artificial intelligence applications.