The U.S. government said Monday it will provide up to $6.6 billion in direct funding to Taiwan Semiconductor Manufacturing Co. to assist in the construction of three leading-edge chip factories in Arizona.
TSMC is now committed to building a third plant for the production of 2-nanometer chips or more advanced processor technologies, which will be operational before 2030, in addition to two previously announced by the company, according to senior administration officials.
"The reason this is such a huge announcement is that because of this partnership, TSMC will be bringing the manufacturing of the world's most advanced semiconductor chips to American soil," U.S. Commerce Secretary Gina Raimondo said.
She told reporters the U.S. government's deal with TSMC, the world's leading manufacturer of advanced chips, is "extremely important for American national security," adding that the new factories will be creating tens of thousands of high-paying jobs.
The funding to support TSMC's investment of more than $65 billion in those facilities in Phoenix will come from the bipartisan CHIPS and Science Act, which President Joe Biden signed into law in August 2022.
The law appropriates $52.7 billion in subsidies to boost production and research of chips in the United States.
Currently, the United States produces less than 10 percent of the world's chips and none of the most advanced ones, even though the technology is integral to everything from cars and cellphones to satellites and military weapons.
"TSMC's renewed commitment to the United States and its investment in Arizona represent a broader story for semiconductor manufacturing that's made in America and with the strong support of America's leading technology firms to build the products we rely on every day," Biden said in a statement.
Besides the direct funding, the Biden administration said it is ready to provide $5 billion in loans to TSMC.
In an attempt to reinvigorate the U.S. chip industry and lower the country's dependence on East Asian producers of the tiny, but vital pieces of technology, Biden said last month his administration will provide up to $8.5 billion in direct funding and another $11 billion in loans to Intel Corp.
The grants, the single largest given to any CHIPS recipient, will be used to help Intel build and upgrade chip production facilities in Arizona, New Mexico, Ohio and Oregon.
With investments from TSMC and other manufacturers, the United States is now on track to churn out about 20 percent of the world's leading-edge chips by 2030, according to the Biden administration.
