Type to search

TSMC Wins Billions in US Aid After Deal on 3rd New Arizona Fab

Washington will award TSMC’s US unit a $6.6bn subsidy and up to $5bn in low-cost loans, after it agreed to expand its investment to $65bn and add a third chip fab in Arizona

TSMC's corporate headquarters in Hsinchu, Taiwan. Photo: TSMC.


The world’s leading chip producer TSMC – Taiwan Semiconductor Manufacturing Company – has won billions of dollars in grants and low-cost loans to set up a facility that will make advanced computer chips in Phoenix Arizona.

The US Commerce Department said on Monday it would award TSMC’s US unit a $6.6-billion subsidy and up to $5 billion in low-cost government loans.

Officials said TSMC had agreed to expand its planned investment by $25 billion to $65 billion and to add a third Arizona fab by 2030. The Taiwanese company will produce the world’s most advanced 2-nanometre chips at its second Arizona fab that is expected to begin production in 2028, they said.


ALSO SEE: US Won’t Allow Chinese Imports to Kill New Industries: Yellen


“These are the chips that underpin all artificial intelligence, and they are the chips that are necessary components for the technologies that we need to underpin our economy, but frankly, a 21st century military and national security apparatus,” Commerce Secretary Gina Raimondo said in a statement.


Taiwan giant to boost Arizona investment

TSMC, which is a major supplier to Apple and Nvidia, had previously announced plans to invest $40 billion in Arizona. The company expects to begin high-volume production in its first US fab there by the first half of 2025, Commerce officials said.

The $65 billion-plus investment by TSMC is the largest foreign direct investment in a completely new project in US history, the department said.

In 2022, Congress approved the Chips and Science Act to boost domestic semiconductor output with $52.7 billion in research and manufacturing subsidies. Lawmakers also approved $75 billion in government loan authority.

TSMC Arizona has also committed to support the development of advanced packaging capabilities through partners in the US to allow customers to purchase advanced chips that are made entirely on US soil, the department said, adding 70% of TSMC customers were US companies.

TSMC chief executive CC Wei said the company would help US tech firms “unleash their innovations by increasing capacity for leading-edge technology through TSMC Arizona.”


Thousands of jobs expected

Commerce expects the projects will create 6,000 direct manufacturing jobs and 20,000 construction jobs. The department said 14 direct suppliers plan to construct or expand TSMC’s US plants.

At full capacity, TSMC’s three fabs in Arizona will manufacture tens of millions of leading-edge chips in 5G/6G smartphones, autonomous vehicles, and AI data centre servers, the department said.

Through its Arizona fabs, TSMC will support key customers like Apple, Nvidia, Advanced Micro Devices and Qualcomm “by addressing their leading-edge capacity demand, mitigating supply chain concerns, and enabling them to compete effectively in the ongoing digital transformation era,” the department added.

Commerce last month announced $8.5 billion in grants and up to $11 billion in loans for Intel to subsidize leading-edge chip production from the same program.

The department is expected to unveil an award for South Korea’s Samsung Electronics as soon as next week, sources said. Commerce declined to comment. Samsung did not respond immediately to a request for comment.


  • Reuters with additional editing by Jim Pollard



Dutch May Give in to US Push Against Servicing China Chip Tools

Samsung Poised For Nine-Fold Profit Jump Thanks to Chip Rebound

TSMC Predicts $60m Hit From Taiwan’s Biggest Quake in 25 Years

US Releases Detailed Rules For Export Curbs on AI Chips to China

Beijing’s Push to Dump Foreign Tech on Display at China Chip Fair

Global Chip Sector ‘Can Never Return to its Pre-Covid Set-up’

US Curbs Set Off Sales, Tech Boom for China Chip Equipment Firms

Japan to Pump $4.9bn Into Second TSMC Chip Factory Plan

US Starts Funding Awards to Ramp up Chip Production at Home

China War Risk Sees Taiwan’s TSMC Moving Fabs to US, Japan

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


AF China Bond