May 27, 2024
US Announces $6.6 Billion in Funding for TSMC Chip Production in Arizona

US Announces $6.6 Billion in Funding for TSMC Chip Production in Arizona

Posted April 8, 2024 at 2:47pm by iClarified
The U.S. Department of Commerce has announced $6.6 billion in direct funding to support TSMC's establishment of leading-edge fabs in Phoenix, Arizona. The Commerce Department has signed a non-binding preliminary memorandum of terms (PMT) with TSMC Arizona to provide the funds under the CHIPS and Science Act.

After initially announcing two fabs in the U.S., TSMC Arizona is committing to build an additional third fab before the end of the decade. With this proposed funding, TSMC Arizona would be ensuring the formation of a scaled leading-edge cluster in Arizona, creating approximately 6,000 direct manufacturing jobs, more than 20,000 accumulated unique construction jobs, and tens of thousands of indirect jobs in this decade and bringing the most advanced process technology to the United States.

"America's ability to maintain our competitive edge in advanced technologies like artificial intelligence is essential to igniting the next generation of research, innovation, development, and production," said Under Secretary of Commerce for Standards and Technology and National Institute of Standards and Technology Director Laurie E. Locascio. "Our proposed support for TSMC Arizona represents an inflection point for America's innovative capacity that would restore our nation's leadership in an industry that is foundational to the U.S. and global digital economy."

"The proposed funding from the CHIPS and Science Act would provide TSMC the opportunity to make this unprecedented investment and to offer our foundry service of the most advanced manufacturing technologies in the United States," said TSMC Chairman Dr. Mark Liu. "Our U.S. operations allow us to better support our U.S. customers, which include several of the world's leading technology companies. Our U.S. operations will also expand our capability to trailblaze future advancements in semiconductor technology."

TSMC currently manufactures over 90% of the world's leading-edge logic chips. In Arizona, TSMC's three fabs are expected to bring a suite of the most advanced process node technologies to the United States: the first fab will produce 4nm FinFET process technologies; today, TSMC Arizona announced that the second fab will produce the world's most advanced 2nm nanosheet process technology, in addition to previously announced plans to produce 3nm process technologies; and TSMC Arizona's third fab will produce 2nm or more advanced process technologies depending on customer demand.

At full capacity, TSMC Arizona's three fabs would manufacture tens of millions of leading-edge chips that will power products like 5G/6G smartphones, autonomous vehicles, and AI datacenter servers. TSMC Arizona expects to begin high-volume production in their first fab in the U.S. by the first half of 2025.

In addition to the proposed direct funding of up to $6.6 billion, the CHIPS Program Office would make approximately $5 billion of proposed loans – which is part of the $75 billion in loan authority provided by the CHIPS and Science Act – available to TSMC Arizona under the PMT. The company has indicated that it is planning to claim the Department of the Treasury's Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures.

Due to investment like these, the Commerce Department estimates the United States is now on track to produce roughly 20% of the world's leading-edge chips by 2030.

US Announces $6.6 Billion in Funding for TSMC Chip Production in Arizona
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