Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has agreed to build a third semiconductor factory in Arizona, raising its total investment in the US to US$65 billion, US officials said yesterday.
White House National Economic Council Director Lael Brainard hailed the election-year news as “a new chapter for America’s semiconductor industry.”
She told reporters the investment planned by TSMC is based on a preliminary agreement with the US Department of Commerce that is tied to a major investment law called the CHIPS and Science Act.
Photo: Caitlin O’Hara, Bloomberg
Under this agreement, TSMC is to receive up to US$6.6 billion in direct funding from the US government and could get up to another US$5 billion in the form of loans.
The law is a pillar of a drive by US President Joe Biden’s administration to protect and strengthen US industrial power as Biden runs for another term in November.
The US is seeking to ward off the prospect of shortages of cutting-edge chips that are essential for making cellphones, electric vehicles and advanced military equipment.
As things stand now, the US is highly dependent on Asia for the components and thus vulnerable in the event of a geopolitical crisis, particularly in a sensitive place such as Taiwan in the face of a growing Chinese military threat.
TSMC, which had already planned to build two plants in Arizona, is going to make semiconductors even more advanced than originally planned at one of them and is also to construct a third facility by 2030, US officials said early yesterday.
The company is thus raising its total investment in the US from US$40 billion to US$65 billion.
“For the first time ever, we will be making at scale the most advanced semiconductor chips on the planet here in the United States of America,” US Secretary of Commerce Gina Raimondo said. “These are the chips that underpin all artificial intelligence.”
Raimondo said that with these plans, TSMC would create at least 6,000 direct high-tech jobs, but also more than 20,000 in the construction of the factories and tens of thousands of indirect jobs.
The commerce department said 14 direct TSMC suppliers plan to construct or expand US plants.
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 that 70 percent of TSMC customers are US companies.
“Our US operations allow us to better support our US customers,” TSMC chairman Mark Liu (劉德音) said.
TSMC, the world’s largest contract chipmaker and a major supplier to Apple Inc and Nvidia Corp, accounts for more than half of the world’s semiconductor production.
The chipmaker expects to begin high-volume production at its first Arizona fab by the first half of next year, and is to produce the world’s most advanced 2-nanometer technology at its second plant in the state, which is expected to begin production in 2028, the department said.
The department last month announced US$8.5 billion in grants and up to US$11 billion in loans for Intel Corp to subsidize leading-edge chip production from the same program.
The department is expected to unveil an award for South Korea’s Samsung Electronics Co as soon as next week, sources said.
Additional reporting by Reuters
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