The U.S. government has announced plans to provide TSMC financial support totaling $11.6 billion, comprising $6.6 billion in grants and up to $5 billion in loans. TSMC will use the funding to build three semiconductor production facilities in Arizona, with a total investment exceeding $65 billion. This is the largest financial package the U.S. government approved under the CHIPS and Science Act.
TSMC will build the third fab module near its Fab 21 phase 1, which should start the production of chips using 4nm and 5nm-class process technologies in the first half of 2025. Fab 21 phase 2 is scheduled to begin operations in 2028, making chips on 2nm and 3nm process technologies. The third plant will likely use an even more advanced fabrication process (TSMC says to expect something at 2nm and sub-2nm), though it is unknown when it will start producing chips.
TSMC’s investment should have a significant economic impact, creating 6,000 high-tech manufacturing jobs and over 20,000 construction jobs. The project also includes a $50 million allocation for training local workers. Arizona is expected to benefit significantly from this investment, with the semiconductor industry’s expansion being a central element of President Joe Biden’s economic agenda.
TSMC’s projects in Arizona have faced challenges, including delays due to labor disputes and uncertainties regarding government support. The second facility’s production timeline has been pushed back from 2026 to 2028. Additionally,Bloombergreports that at least one TSMC supplier has abandoned its planned Arizona project, citing workforce difficulties.
Financially, TSMC plans to apply for U.S. Treasury Department Investment Tax Credits of up to 25% of the qualified capital expenditure at TSMC Arizona. Meanwhile, the payout of the promised funds to TSMC is subject to a due diligence period, followed by the fulfillment of construction and productionbenchmarks. The final agreement between TSMC and the U.S. government is still pending, and the funds may be subject to return provisions if TSMC fails to meet its commitments on time.
The financial support package for TSMC is part of President Joe Biden’s push to revitalize the U.S. semiconductor industry under the 2022 CHIPS and Science Act. This legislation allocates $39 billion in direct grants, alongside $75 billion in loans and guarantees, to encourage semiconductor companies to establish manufacturing operations in the U.S. This move aims to reverse the trend of outsourcing production overseas and strengthen the country’s technological independence.
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Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
