US Government Grants TSMC Arizona $11 Billion Package to Boost Domestic Semiconductor Production
The Biden administration has awarded TSMC Arizona $11.6 billion through the CHIPS and Science Act to enhance domestic chip manufacturing capabilities. The funding package includes $6.6 billion in direct funding and $5 billion in loans, supporting TSMC's planned $65 billion investment in three Arizona facilities.
The Biden administration announced on Nov. 15 a substantial $11.6 billion CHIPS and Science Act package for TSMC Arizona, a division of the global semiconductor manufacturing leader, to strengthen U.S. chip production capabilities.
The comprehensive package comprises $6.6 billion in direct funding and potential loans of up to $5 billion. In return, TSMC has committed to a $65 billion investment across three manufacturing facilities in Arizona.
Two years prior, President Joe Biden conducted an inspection of a new semiconductor manufacturing complex in Arizona, which included both TSMC's U.S. expansion and Intel's domestic production revival. His visit highlighted the significance of the CHIPS and Science Act, which received his signature in August 2022.
He emphasized that while semiconductors were an American invention and the U.S. once dominated 40 percent of global production, domestic manufacturing has declined to roughly 10 percent, with no advanced chip production capability.
"I entered office with a commitment to change that situation," Biden stated while announcing the new incentives package. "Today's finalized agreement with TSMC—the world's premier advanced semiconductor manufacturer—will drive $65 billion in private sector investment to establish three cutting-edge facilities in Arizona, generating tens of thousands of jobs through the decade's end."
The president characterized the agreement as one of the CHIPS Act's "most significant achievements" to date, confirming that initial TSMC operations will commence in early 2025.
"The first of TSMC's three facilities will be fully operational in early 2025, marking the first time in decades that American soil will host production of the most sophisticated chips powering our advanced technologies—from smartphones to autonomous vehicles and AI data centers," Biden explained.
TSMC, headquartered in Taiwan, maintains exclusive capabilities in producing the world's smallest and most advanced semiconductors. Their decision to manufacture advanced chips in America represents a major victory for recent administrations' efforts to secure partnerships with this strategically vital manufacturer, particularly given rising tensions between China and Taiwan.
The three planned facilities are expected to deliver a substantial volume of leading-edge chips crucial for AI applications, high-performance computing, and consumer electronics, including next-generation 5G and 6G mobile devices and autonomous transportation systems.
According to the administration's November 15 statement, the TSMC investment is projected to generate 6,000 manufacturing positions and over 20,000 construction jobs.
TSMC Chairman and CEO C.C. Wei described the agreement as a "crucial milestone" in establishing U.S.-based chip production, building on a partnership initiated in 2020.
Commerce Secretary Gina Raimondo emphasized the investment's strategic importance to national interests.
"The Biden-Harris Administration's TSMC Arizona investment marks a transformative moment for American innovation and manufacturing, reinforcing both our economic stability and national security," she stated.
Raimondo has consistently alerted Congress and the public about the national security risks posed by the Chinese communist regime's influence over global semiconductor supply chains.
Semiconductors are fundamental to all electronic devices, with advanced chips holding particular military significance. The brief supply chain disruption during the 2020 COVID-19 pandemic demonstrated how economic activity could halt if similar interruptions occurred.
The federal government has recently announced additional CHIPS Act investments, including $825 million for an Albany, New York research facility and $18.2 million for Akash Systems.
Jonathan Reed
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