US Finalises $6.6bn Award For TSMC Arizona Plants

The Biden administration said the US Commerce Department has finalised $6.6 billion (£5.2bn) in direct funding to Taiwanese chip manufacturer TSMC to build three greenfield leading-edge plants in Arizona.

The award is the first to be finalised under the 2022 Chips and Science Act, which allocated $52.7bn to encourage companies to manufacture essential semiconductors on US soil.

It follows a preliminary agreement announced in April and the completion of a Commerce Department review.

The first of the three plants is expected to open next year, and will be the first time in decades that leading-edge chips will be manufactured in the US.

‘Critical milestone’

The facilities “will create tens of thousands of jobs by the end of the decade”, Biden said in a statement.

“This is the largest foreign direct investment in a greenfield projecting the history of the United States.

“Today’s announcement is among the most critical milestones yet in the implementation of the bipartisan Chips and Science Act and demonstrates how we are ensuring that the progress made to date will continue to unfold in the coming years, benefiting communities all across the country.”

The administration previously said that once the three plants are operational they will account for 20 percent of the world’s most advanced chips.

TSMC chairman and chief executive CC Wei said the deal would help it “accelerate the development of the most advanced semiconductor manufacturing technology available in the US”.

Domestic production

The award also includes up to $5bn in low-cost government loans.

The Commerce Department expects to release at least $1bn to TSMC by the end of the year, a senior official told journalists.

Under the provisional agreement in April TSMC agreed to expand its planned $25bn investment to $65bn and add a third Arizona fabrication plant by 2030.

The Commerce Department has allocated $36bn for semiconductor projects to date, including $6.4bn for Samsung Electronics in Texas, $8.5bn for Intel and $6.1bn for Micron Technology.

The department is working to finalise the agreements before Biden leaves office in January.

His successor, Donald Trump, has criticised the programme.