TSMC to build second Arizona plant for 3nm process

TSMC announced a second chip plant for Arizona to begin production of highly coveted 3nm process technology in 2026. 

 The Tuesday announcement was timed with a visit by President Biden to TSMC facilities in Phoenix. He was joined by executives from companies that are customers of TSMC, including Apple and Nvidia, all supporters of the CHIPS and Science Act signed by the president in August.

"American manufacturing is back," President Biden said at the event.  Noting suppliers and customers of TSMC in attendance, he added, "they all depend on a strong supply chain and that's why what we're doing here matters." 

The second fab will join TSMC’s first under construction at the Arizona site, to begin production of N4 process technology in 2024. The total investment for both plants is expected to be about $40 billion, up from $12 billion, making it the largest foreign direct investment in Arizona history and one of the largest foreign direct investments in the US, according to TSMC. The two fabs will employ 10,000 construction workers and create 10,000 high tech jobs, including 4,500 with TSMC.

TSMC is also planning an industrial water reclamation plant to allow the Arizona site to achieve near zero liquid discharge. “TSMC Arizona aims to be the greenest semiconductor manufacturing facility in the United States producing the most advanced semiconductor process technology in the country,” said TSMC Chairman Dr. Mark Liu.

Members of the Biden administration and members of Congress have expressed concerns for months about the future of TSMC, based in Taiwan, and the availability of advanced chips from its fabs there in light of threats that China could invade Taiwan and seize control of TSMC operations.

President Biden’s visit followed the bipartisan passage of the CHIPS Act signed into law in August. It provides $52 billion in loans, grants and other incentives and billions more in tax credits to boost domestic chip production.

Both new TSMC plants could produce 600,000 wafers a year, enough to meet US annual demand, according to comments by Ronnie Chatterji, acting deputy director for industrial policy for the National Economic Council.

National Economic Council Director Brian Deese told reporters the CHIPS Act helped set the stage for TSMC’s expansion announcement. The president also intended to talk at the event with CEOs and other top leaders from Apple, AMD, Micron, Nvidia and ASML. “To have all these CEOs together to mark this occasion is a reflection of the fact that this is about more than just one groundbreaking but how we build out this innovation ecosystem for semiconductors in the United States,” Deese said.

Deese said he and the president would join Commerce Secretary Gina Raimondo in talking with CEOs about strategy, including implementation of the CHIPS Act as well as recent export sanctions on chips and chipmaking gear sold into China.

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