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In addition to direct funding of $6.6bn, the government will also provide TSMC with $5bn in low-cost loans.
The US government has awarded Taiwan Semiconductor Manufacturing Corporation (TSMC) $6.6bn in direct funding to support the company’s US unit in its planned investment of $65bn in the US state of Arizona to build three facilities and create “tens of thousands” of jobs by 2030.
In addition to direct funding, the government will also provide TSMC with $5bn in low-cost loans.
The investment is connected to the US Chips and Science Act, which aims to boost US semiconductor research, development and production. The US government and TSMC signed a preliminary agreement in April.
This is the largest foreign direct investment in US history for a greenfield project, according to US president Joe Biden.
“For the first time in decades an American manufacturing plant will be producing the leading-edge chips used in our most advanced technologies – from our smartphones, to autonomous vehicles, to the data centres powering artificial intelligence,” said Biden in a statement today (15 November).
“The US invented semiconductors and used to manufacture nearly 40pc of the world’s chips, but now makes closer to 10pc of them and none of the most advanced chips,” he said.
The US Department of Commerce, in its announcement, said that the investment is a “significant” step toward providing a reliable domestic supply of chips, powering AI and other fast-growing industries.
“At full capacity, TSMC Arizona’s three fabs are expected to manufacture 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,” the department said. According to the US department, the first of the three planned TSMC facilities will open early next year.
One of the most valuable companies in the world, TSMC has a market valuation of more than €900bn and includes heavyweight software giants Nvidia, Apple, AMD and Qualcomm among its customers.
However, US president-elect Donald Trump is not a fan of Taiwan’s chips. In an appearance on ‘The Joe Rogan Experience’ podcast, Trump accused Taiwan of stealing the US’s chip industry. Criticising the US Chips Act, he said he would implement tariffs on chips from Taiwan if elected.
The US has been on a spending spree to boost its domestic production of semiconductors, allocating more than $36bn in proposed funding across the country and has proposed to invest “billions more” in research and innovation, expecting to create more than 125,000 jobs. In February, the US said it expects to invest more than $5bn in its semiconductor R&D industry under the Chips and Science Act.
Recently, the country said it would give Intel $8.5bn to help the chipmaker boost domestic production – a plan that will likely be finalised by the end of the year.
Earlier this year, TSMC announced that it is building a €10bn chip plant in Dresden, Germany, the company’s first in Europe, with the facility expected to create 11,000 jobs.
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