Download this article in PDF format.
The U.S. Department of Commerce has awarded TSMC Arizona Corporation (TSMC Arizona), a subsidiary of Taiwan Semiconductor Manufacturing Company Limited (TSMC), up to $6.6 billion in direct funding under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities.
The award will support the company’s planned investment of more than $65 billion in three greenfield leading-edge fabs in Phoenix, Ariz. The department will disburse the funds based on TSMC Arizona’s completion of project milestones.
“Two years ago, shortly after I signed the CHIPS & Science Act, I visited Arizona to announce a commitment by TSMC to invest in America, create American jobs, and shore up American supply chains,” said President Joe Biden in an award announcement.
“Today’s final agreement with TSMC – the world’s leading manufacturer of advanced semiconductors – will spur $65 billion dollars of private investment to build three state-of-the-art facilities in Arizona and create tens of thousands of jobs by the end of the decade,” he added. “This is the largest foreign direct investment in a greenfield project in the history of the United States.”
Reliable Domestic Chip Supply
Through this new investment in TSMC Arizona, the CHIPS Program Office wants to strengthen U.S. economic and national security by helping to provide a reliable domestic supply of the chips. The first of TSMC’s three facilities is on track to open early next year. At that point, an American manufacturing plant will be producing the leading-edge chips used in advanced technologies, including smartphones, autonomous vehicles and data centers that power artificial intelligence (AI).
Reuters says TSMC will produce the world's most advanced 2 nanometer technology at its second Arizona fab, which is expected to begin production in 2028. TSMC also agreed to use its most advanced chip manufacturing technology called "A16" in Arizona.
"When we started this there were a lot of naysayers who said maybe TSMC will do 5 or 6 nanometer in the United States," Commerce Secretary Gina Raimondo told Reuters. "Actually they are doing their most sophisticated chips in the United States."
Key Facts
Once at full capacity, TSMC Arizona’s three fabs will be manufacturing “tens of millions of leading-edge logic chips that will power products like 5G/6G smartphones, autonomous vehicles, and high-performance computing and AI applications,” according to the U.S. Department of Commerce, which also says that:
- Early production yields at the first TSMC plant in Arizona are on par with similar factories in Taiwan.
- The advanced chips that TSMC manufactures for its customers are the backbone of central processing units (“CPUs”) for servers in large-scale datacenters and of specialized graphics processing units (“GPUs”) used for machine learning.
- The investment is expected to create approximately 6,000 direct manufacturing jobs and more than 20,000 total unique construction jobs.
- Along with the direct funding, the CHIPS Program Office will provide up to $5 billion of proposed loans to TSMC Arizona under the award.
- CHIPS for America will distribute direct funding to recipients for capital expenditures based on the completion of construction, production, and commercial milestones, and disburse loans to TSMC Arizona for amounts invested in capital expenditures.
- The program will track the performance of each CHIPS Incentives Award via financial and programmatic reports.
“Entering this phase of the U.S. CHIPS and Science Act marks a pivotal step in strengthening the semiconductor ecosystem in the United States,” said TSMC Chairman and CEO Dr. C.C. Wei, in the announcement.
“TSMC appreciates the continual collaboration with customers, partners, local communities and the U.S. government beginning in early 2020,” Wei continued. “The signing of this agreement helps us to accelerate the development of the most advanced semiconductor manufacturing technology available in the U.S.”
