TSMC's Arizona Expansion Secures Record $6.6B Boost from US Government

Taiwan Semiconductor Manufacturing Co. (TSMC) is set to receive a major boost from the US government for its expansion plans in Arizona. The Biden administration has announced a preliminary agreement to provide up to $6.6 billion in funding under the US CHIPS and Science Act.

NBC News tells us that this funding will support TSMC's ambitious investment of over $65 billion in three fabrication plants in Phoenix, Arizona.

Additionally, TSMC is eligible for around $5 billion in proposed loans under the CHIPS Act, aimed at bolstering the domestic chip industry in the United States.

TSMC's Arizona Chip Expansion

Commerce Secretary Gina Raimondo hailed the agreement as "huge," emphasizing the importance of bringing the manufacturing of advanced chips to American soil. The partnership with TSMC is expected to create significant job opportunities and drive economic growth in Arizona.

Part of the funds, approximately $50 million, will be allocated for training and developing local talent in Arizona. TSMC's presence in the state has already led to the creation of over 25,000 jobs and attracted 14 semiconductor suppliers.

The CHIPS Act passed in August 2022, is a comprehensive package aimed at enhancing the competitiveness of the US chip industry and strengthening national security. It provides incentives for companies to produce chips domestically, with a focus on avoiding reliance on foreign sources, particularly in countries deemed national security risks.

TSMC's investment in Arizona represents the largest foreign direct investment in the state's history for a greenfield project. The company's Arizona factories are expected to serve major customers such as Apple and AMD, further solidifying its position in the industry.

(Photo : SAM YEH/AFP via Getty Images)

This photo taken on March 25, 2021 shows a factory of Taiwanese semiconductors manufacturer TSMC at Central Taiwan Science Park in Taichung.

More Chips Company to Receive Government Funding

In addition to TSMC, other companies have also received funding under the CHIPS Act, including Intel, which was awarded up to $8.5 billion in indirect funding and up to $11 billion in loans last month.

TSMC's investment will contribute to the US's goal of producing approximately 20% of the world's leading-edge chips by 2030, according to the Commerce Department.

The first TSMC plant in Arizona will produce 4-nanometer chips and is expected to start production in 2025. Speaking with Nikkei Asia, the company said that its second plant, which was originally designed to make 3-nm chips, will now also produce 2-nm chips. This plant is set to begin production in 2028, according to a senior US official.

Despite facing challenges such as labor shortages and permit delays, TSMC remains committed to its Arizona expansion. The company plans to bring in expertise from Taiwan to overcome these hurdles and ensure the successful implementation of its projects.

Looking ahead, Commerce Secretary Gina Raimondo hinted at more grants to follow under the CHIPS Act. The US government is also expected to provide support to other semiconductor giants, including Samsung and SK Hynix, which have announced significant investments in the US.

Stay posted here at Tech Times.