Taiwan Semiconductor Manufacturing Company (TSMC)’s Arizona subsidiary is set to gain up to $6.6 billion in funding from the U.S. government as part of a preliminary agreement announced by the Joe Biden administration. The funding, under the US CHIPS and Science Act, is intended to support TSMC’s substantial investment of over $65 billion in establishing three advanced fabrication plants in Phoenix, Arizona.
The nonbinding agreement also stipulates that TSMC could be eligible for around $5 billion in proposed loans under the CHIPS Act, aiming to bolster the American semiconductor industry. U.S. Secretary of Commerce Gina Raimondo emphasized the significance of this partnership, stating that it will bring the production of cutting-edge chips to U.S. soil and contribute to enhancing the country’s competitiveness in the global semiconductor market.
Secretary Raimondo highlighted that beyond the financial support, $50 million from the funds will be allocated for training and developing local talent in Arizona. TSMC’s presence in Arizona has already generated more than 25,000 jobs and attracted 14 semiconductor suppliers to the state, promoting economic growth and technological advancement.
The CHIPS Act, enacted in August 2022, is a substantial investment of nearly $53 billion aimed at strengthening the domestic chip industry to ensure national security and economic competitiveness. The legislation offers incentives for companies to manufacture chips in the U.S., provided they refrain from expanding certain semiconductor operations in countries like China, deemed as strategic risks to national security.
TSMC’s significant investment in Arizona represents the largest foreign investment in the state’s history, showcasing the leadership in the semiconductor industry from both the Biden administration and the U.S. Congress. The Arizona facilities are expected to cater to customers such as Apple and AMD, highlighting TSMC’s pivotal role as a global leader in semiconductor fabrication.
Other companies benefiting from the CHIPS Act include GlobalFoundries, Microchip, BAE Systems, and Intel. Intel, for instance, received up to $8.5 billion in indirect funding and up to $11 billion in loans last month, further demonstrating the impact of the legislation in fortifying the U.S. semiconductor industry.
