Taiwan Semiconductor (TSM) is set to receive $11.6 billion in U.S. grants and loans for constructing three chip plants in Arizona. This initiative, comprising $6.6 billion in grants and up to $5 billion in loans, is aimed at revitalizing the domestic semiconductor industry. With this, the total investment in the U.S. will reach $65 billion, with plans to produce 2-nanometer chips by 2028, according to the Commerce Department’s announcement.
On Monday, the U.S. Commerce Department announced a substantial subsidy of $6.6 billion for Taiwan Semiconductor Manufacturing Co’s (TSMC) U.S. unit. This support aims to facilitate advanced semiconductor production in Phoenix, Arizona, alongside up to $5 billion in low-cost government loans.
In response, TSMC has committed to enlarging its initial investment by $25 billion, reaching a total of $65 billion, and has pledged to establish a third Arizona fab by 2030. This decision was made in accordance with the Commerce Department’s preliminary award.
The newly established Arizona fab is set to commence production by 2028, focusing on the world’s most advanced 2 nanometer technology. TSMC’s first U.S. fab, already in development, anticipates commencing high-volume production by the first half of 2025.
This investment marks a significant milestone, as TSMC’s $65 billion-plus commitment stands as the largest foreign direct investment in a new U.S. project in history, according to the Commerce Department.
In 2022, Congress passed the Chips and Science Act to bolster domestic semiconductor output, allocating $52.7 billion in research and manufacturing subsidies, along with $75 billion in government loan authority.
TSMC Arizona has further pledged to support the advancement of advanced packaging capabilities through partnerships within the U.S. This initiative aims to enable customers to procure cutting-edge chips entirely manufactured on U.S. soil, with 70% of TSMC’s customers being U.S. companies.
TSMC’s CEO, C.C. Wei, expressed the company’s commitment to assisting U.S. tech firms in harnessing their innovations by expanding capacity for leading-edge technology through TSMC Arizona.
The Commerce Department foresees the projects generating 6,000 direct manufacturing jobs and 20,000 construction positions. Additionally, 14 direct TSMC suppliers have outlined plans to construct or expand plants within the U.S.
Recently, Commerce also announced significant grants and loan allocations totaling $8.5 billion and up to $11 billion respectively for Intel, to support leading-edge chip production, through the same program.
Furthermore, the department is poised to unveil an award for South Korea’s Samsung Electronics in the upcoming week, as per sources.
TSMC intends to seek investment tax credits from the U.S. Treasury Department, amounting to up to 25% of the qualified capital expenditure at TSMC Arizona.
(with the inputs from Reuters)
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