The world’s leading chip producer TSMC – Taiwan Semiconductor Manufacturing Company – has won billions of dollars in grants and low-cost loans to set up a facility that will make advanced computer chips in Phoenix Arizona.
The US Commerce Department said on Monday it would award TSMC’s US unit a $6.6-billion subsidy and up to $5 billion in low-cost government loans.
Officials said TSMC had agreed to expand its planned investment by $25 billion to $65 billion and to add a third Arizona fab by 2030. The Taiwanese company will produce the world’s most advanced 2-nanometre chips at its second Arizona fab that is expected to begin production in 2028, they said.
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“These are the chips that underpin all artificial intelligence, and they are the chips that are necessary components for the technologies that we need to underpin our economy, but frankly, a 21st century military and national security apparatus,” Commerce Secretary Gina Raimondo said in a statement.
Taiwan giant to boost Arizona investment
TSMC, which is a major supplier to Apple and Nvidia, had previously announced plans to invest $40 billion in Arizona. The company expects to begin high-volume production in its first US fab there by the first half of 2025, Commerce officials said.
The $65 billion-plus investment by TSMC is the largest foreign direct investment in a completely new project in US history, the department said.
In 2022, Congress approved the Chips and Science Act to boost domestic semiconductor output with $52.7 billion in research and manufacturing subsidies. Lawmakers also approved $75 billion in government loan authority.
TSMC Arizona has also committed to support the development of advanced packaging capabilities through partners in the US to allow customers to purchase advanced chips that are made entirely on US soil, the department said, adding 70% of TSMC customers were US companies.
TSMC chief executive CC Wei said the company would help US tech firms “unleash their innovations by increasing capacity for leading-edge technology through TSMC Arizona.”
Thousands of jobs expected
Commerce expects the projects will create 6,000 direct manufacturing jobs and 20,000 construction jobs. The department said 14 direct suppliers plan to construct or expand TSMC’s US plants.
At full capacity, TSMC’s three fabs in Arizona will manufacture tens of millions of leading-edge chips in 5G/6G smartphones, autonomous vehicles, and AI data centre servers, the department said.
Through its Arizona fabs, TSMC will support key customers like Apple, Nvidia, Advanced Micro Devices and Qualcomm “by addressing their leading-edge capacity demand, mitigating supply chain concerns, and enabling them to compete effectively in the ongoing digital transformation era,” the department added.
Commerce last month announced $8.5 billion in grants and up to $11 billion in loans for Intel to subsidize leading-edge chip production from the same program.
The department is expected to unveil an award for South Korea’s Samsung Electronics as soon as next week, sources said. Commerce declined to comment. Samsung did not respond immediately to a request for comment.
- Reuters with additional editing by Jim Pollard
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