TSMC has joined the growing list of semiconductor firms touting agreements with the U.S. government to secure billions of dollars in funding–about $6.6 billion in direct funding in TSMC’s case–under the U.S. CHIPS and Science Act.
Like Intel and GlobalFoundries, the Taiwanese chip giant’s TSMC Arizona operation is among a handful of companies that have signed “a non-binding preliminary memorandum of terms” with the U.S. Department of Commerce. The deal will trigger up to $6.6 billion in direct funding for previously announced TSMC Arizona projects, but also is being unveiled along with a new plan from TSMC for a third new fab to be built in the Southwestern state.
The agreement also proposes to provide TSMC with up to US$5 billion in loans, and the company plans to apply for U.S. Treasury Department Investment Tax Credits of up to 25% of the qualified capital expenditure at TSMC Arizona.
Along with the two other fabs TSMC already is building in Arizona, the newly-announced third project in the state will bring TSMC’s total capital expenditure for the Phoenix, Arizona site to more than $65 billion, “making the site the largest foreign direct investment in Arizona history, and the largest foreign direct investments in a greenfield project in U.S. history,” according to a company statement.
TSMC Arizona’s first fab is on track to begin production leveraging 4nm technology in first half of 2025, while the second facility will produce 2nm process technology with next-generation nanosheet transistors in addition to the previously announced 3nm technology, with production beginning in 2028. The third fab will produce chips using 2nm or more advanced processes, with production beginning by the end of the decade, the company said, adding that all three fabs, like all of TSMC’s advanced fabs, will have cleanroom areas approximately double the size of an industry standard logic fab. The fabs also are expected to create about 6,000 direct high-tech, high-wage jobs and, according to an analysis by the Greater Phoenix Economic Council, more than 20,000 accumulated unique construction jobs, and tens of thousands of indirect supplier and consumer jobs.
The announcement comes as semiconductor industry leaders continue to be optimistic about the growth of their industry, with 83% of sector leaders in a survey by KPMG and the Global Semiconductor Alliance saying they expect their own company’s revenue to grow in 2024.
“The CHIPS and Science Act provides TSMC the opportunity to make this unprecedented investment and to offer our foundry service of the most advanced manufacturing technologies in the United States,” said TSMC Chairman Dr. Mark Liu. “Our U.S. operations allow us to better support our U.S. customers, which include several of the world’s leading technology companies. Our U.S. operations will also expand our capability to trailblaze future advancements in semiconductor technology.”
“We are honored to support our customers who have been pioneers in mobile, artificial intelligence and high-performance computing, whether in chip design, hardware systems or software, algorithms, and large language models,” added TSMC CEO Dr. C.C. Wei. “They are the innovators driving demand for the most advanced silicon that TSMC can provide. As their foundry partner, we will help them unleash their innovations by increasing capacity for leading-edge technology through TSMC Arizona. We are thrilled by the progress of our Arizona site to date and are committed to its long-term success.”