Semiconductors

U.S. Finalizes TSMC's $6.6 Billion CHIPS Act

Kenneth Metral

Nov 15, 2024 — 1 min read

Image Credit: Taiwan Semiconductor Manufacturing Company Limited

The U.S. government has finalized a $6.6 billion grant to Taiwan Semiconductor Manufacturing Co. (TSMC) under the CHIPS Act, aiming to boost domestic semiconductor production. TSMC plans to invest $65 billion in a three-factory complex in Arizona, with the first facility set to open early next year. The company will also receive up to $5 billion in government loans to support this expansion. This initiative is part of a broader effort to strengthen the U.S. semiconductor industry and reduce reliance on foreign suppliers.

TSMC's Arizona project is expected to create approximately 6,000 high-tech jobs and tens of thousands of additional positions in construction and related sectors. The first facility is scheduled to begin production in 2025, focusing on advanced 4-nanometer and 5-nanometer process technologies. The second and third facilities are planned to commence operations in 2028 and 2030, respectively, with the third fab anticipated to utilize TSMC's most advanced 2-nanometer technology.

This substantial investment aligns with the objectives of the CHIPS Act, which was enacted to enhance U.S. competitiveness in semiconductor manufacturing amid global supply chain challenges and geopolitical tensions. By increasing domestic production capacity, the U.S. aims to reduce its dependence on foreign semiconductor suppliers and bolster national security.

However, the project has faced challenges, including higher construction costs and a shortage of skilled labor in the U.S. TSMC has addressed these issues by sending American workers to Taiwan for training and bringing in experienced technicians from Taiwan to assist with the Arizona facilities.

The finalized grant and loan agreements underscore the U.S. government's commitment to revitalizing its semiconductor industry and ensuring a resilient supply chain for critical technologies. TSMC's investment is expected to play a pivotal role in achieving these goals, contributing to economic growth and technological advancement in the United States.

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