TSMC secures $6.6 billion US subsidy for Arizona chip plant
The US government has granted a $6.6 billion subsidy to US unit of Taiwan Semiconductor Manufacturing Company (TSMC). This funding is designed to bolster the production of advanced semiconductors in Phoenix, Arizona. The subsidy package includes up to $5 billion in low-interest government loans. TSMC has pledged to increase its initial investment from $40 billion to $65 billion. The company will also establish a third fabrication facility in Arizona by 2030.
TSMC to commence production of advanced 2nm chips in Arizona
TSMC "will produce the world's most advanced two nanometer technology at its second Arizona fab expected to begin production in 2028," the US Commerce Department said Monday. "These are the chips that underpin all artificial intelligence, and they are necessary components for the technologies that we need to underpin our economy, but frankly, a 21st century military and national security apparatus," said Commerce Secretary Gina Raimondo. TSMC's first US chip factory is expected to begin high-volume production by early 2025.
TSMC's investment marks historic foreign direct investment
TSMC's investment surpasses $65 billion, marking it as the largest foreign direct investment in a new project in US history. This aligns with the Chips and Science Act passed by Congress in 2022, which aims to enhance domestic semiconductor production through research and manufacturing subsidies and government loan authority. The Act provides $52.7 billion in subsidies and $75 billion in government loan for this purpose. A major supplier to Apple and NVIDIA, TSMC is the world's largest contract chipmaker.
TSMC's expansion expected to generate thousands of jobs
TSMC Arizona has committed to developing advanced packaging capabilities through US partners. This will enable customers to purchase advanced chips manufactured entirely within the country. TSMC CEO C.C. Wei stated that the company aims to boost US tech firms' innovation by increasing capacity for cutting-edge technology via TSMC Arizona. The Commerce Department anticipates that TSMC's projects will generate 6,000 manufacturing jobs and 20,000 construction jobs. Additionally, 14 TSMC suppliers are planning to build or expand plants in the US.
TSMC's Arizona facilities to produce leading-edge chips
Once operating at full capacity, TSMC's three Arizona facilities will produce millions of leading-edge chips for 5G/6G smartphones, autonomous vehicles, and AI data center servers. The Commerce Department noted that TSMC would cater to major customers like Apple, NVIDIA, Advanced Micro Devices (AMD), and Qualcomm by meeting their capacity needs. This is expected to alleviate supply chain issues and enable these companies to compete effectively in the digital transformation era.
