TSMC’s subsidiary in Arizona is expected to secure a maximum of $6.6 billion in funding from the U.S. government, as per a preliminary agreement unveiled by the Biden administration on Monday.
Under the nonbinding agreement, the funding provided by the U.S. CHIPS and Science Act will be used to support TSMC’s investment of over $65 billion in three advanced fabrication plants located in Phoenix, Arizona.
The CHIPS Act has proposed loans of approximately $5 billion for the Taiwanese multinational semiconductor company.
During a news briefing, Commerce Secretary Gina Raimondo expressed her excitement about the agreement, describing it as “huge.” She emphasized that the partnership with TSMC will enable the manufacturing of the world’s most advanced chips to take place on American soil.
Raimondo stated that the funds will consist of $50 million designated for the training and development of local talent in Arizona. TSMC Arizona has already been instrumental in generating over 25,000 jobs and has successfully attracted 14 semiconductor suppliers to the state.
The CHIPS Act, which was approved in August 2022, is a comprehensive $53 billion initiative aimed at strengthening the U.S. domestic chip industry. Its primary objectives are to enhance the country’s economy and bolster its national security capabilities, particularly in light of increasing competition from countries like China.
The legislation offers substantial incentives for companies to manufacture chips in the United States, with the condition that they refrain from expanding specific semiconductor manufacturing operations in China and other countries considered to pose a national security risk.
On Monday, Raimondo praised TSMC’s investment in Arizona as the largest foreign investment in the state’s history. She saw this as a testament to the strong chip leadership displayed by the Biden administration and the U.S. Congress.
TSMC, a global leader in semiconductor fabrication, holds the top position in producing cutting-edge logic chips, which are crucial for emerging technologies like artificial intelligence. Notably, its Arizona facilities are anticipated to supply chips to prominent customers such as Apple and AMD.
Several other companies have been granted funding under the CHIPS Act. These companies include GlobalFoundries, Microchip, BAE Systems, and Intel. In fact, Intel was recently awarded up to $8.5 billion in indirect funding and up to $11 billion in loans.
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