Biden-Harris Administration: CHIPS Incentives Award to TSMC Arizona

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TSMC Arizona Corporation (TSMC Arizona), a subsidiary of Taiwan Semiconductor Manufacturing Company Limited (TSMC), up to $6.6 billion in direct funding under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities. The award comes after the previously signed preliminary memorandum of terms, announced on April 8, 2024, and the completion of the Department’s due diligence. The award will support the company’s planned investment of more than $65 billion in three greenfield leading-edge fabs in Phoenix, Arizona. The Department will disburse the funds based on TSMC Arizona’s completion of project milestones.

“Two years ago, shortly after I signed the CHIPS & Science Act, I visited Arizona to announce a commitment by TSMC to invest in America, create American jobs, and shore up American supply chains. On that day, I spoke about how the United States invented semiconductors and used to manufacture nearly 40% of the world’s chips, but now makes closer to 10% of them and none of the most advanced chips. I came to office determined to change that, and we have since delivered on that promise, catalyzing nearly $450 billion in private investment in semiconductors, creating over 125,000 new construction and manufacturing jobs, and reshoring critical technologies to bolster our national and economic security,” said President Joe Biden. “Today’s final agreement with TSMC – the world’s leading manufacturer of advanced semiconductors – will spur $65 billion dollars of private investment to build three state-of-the-art facilities in Arizona and create tens of thousands of jobs by the end of the decade. This is the largest foreign direct investment in a greenfield project in the history of the United States. The first of TSMC’s three facilities is on track to fully open early next year, which means that for the first time in decades an America manufacturing plant will be producing the leading-edge chips used in our most advanced technologies – from our smartphones, to autonomous vehicles, to the data centers powering artificial intelligence. Today’s announcement is among the most critical milestones yet in the implementation of the bipartisan CHIPS & Science Act, and demonstrates how we are ensuring that the progress made to date will continue to unfold in the coming years, benefitting communities all across the country.”

“The Biden-Harris Administration’s investment in TSMC Arizona is a turning point for American innovation and manufacturing that will strengthen our economic and national security,” said U.S. Secretary of Commerce Gina Raimondo. “The leading-edge chips that will be manufactured in Arizona are foundational to the United States' technological and economic leadership in the 21st century. Because of President Biden and Vice President Harris, the most advanced semiconductor technology on the planet will be made in America, creating thousands of jobs in the process.”

Through this investment in TSMC Arizona, the CHIPS Program Office is taking a significant step to strengthen U.S. economic and national security by helping to provide a reliable domestic supply of the chips that will underpin the 21st century technology economy, powering artificial intelligence (“AI”) and other fast-growing industries like high-performance computing, consumer electronics, automotive, and Internet of Things. At full capacity, TSMC Arizona’s three fabs are expected to manufacture tens of millions of leading-edge logic chips that will power products like 5G/6G smartphones, autonomous vehicles, and high-performance computing and AI applications. Early production yields at the first TSMC plant in Arizona are on par with similar factories in Taiwan. The advanced chips that TSMC manufactures for its customers – including its A16 technology, which is the most advanced semiconductor technology in the world – are the backbone of central processing units (“CPUs”) for servers in large-scale datacenters and of specialized graphics processing units (“GPUs) used for machine learning. The Biden-Harris Administration’s investment is expected to create approximately 6,000 direct manufacturing jobs and more than 20,000 total unique construction jobs.

“Entering this phase of the U.S. CHIPS and Science Act marks a pivotal step in strengthening the semiconductor ecosystem in the United States,” said TSMC Chairman and CEO Dr. C.C. Wei. “TSMC appreciates the continual collaboration with customers, partners, local communities and the U.S. government beginning in early 2020. The signing of this agreement helps us to accelerate the development of the most advanced semiconductor manufacturing technology available in the U.S.”

In addition to the direct funding of up to $6.6 billion, the CHIPS Program Office will provide up to $5 billion of proposed loans – which is part of the $75 billion in loan authority provided by the CHIPS and Science Act – to TSMC Arizona under the award. As stated in the CHIPS Notice of Funding Opportunity for Commercial Fabrication Facilities, CHIPS for America will distribute direct funding to recipients for capital expenditures based on the completion of construction, production, and commercial milestones, and disburse loans to TSMC Arizona for amounts invested in capital expenditures. The program will track the performance of each CHIPS Incentives Award via financial and programmatic reports, in accordance with the award terms and conditions.