US gives TSMC $6.6 billion in grants and $5 billion in loans to boost chip manufacturing in Arizona

US Department of Commerce He said On Monday, it signed an agreement to give Taiwan Semiconductor Manufacturing Company (TSMC) $6.6 billion in direct financing under the CHIPS and Science Act to establish semiconductor factories in Phoenix, Arizona, and provide up to $5 billion in loans.

The grant, intended for the company’s US subsidiary TSMC Arizona, is the latest move by the US to boost its domestic semiconductor supply as it seeks to restart chip manufacturing amid escalating geopolitical tensions between the US and China.

The CHIP Act, signed into law in 2022, allocates an investment of about $280 billion to boost domestic chip research and production in the United States, of which about $52 billion is allocated to support domestic chip manufacturing. Besides national security concerns arising from manufacturing semiconductors primarily in Asia, a big incentive for the United States is to diversify semiconductor production and bring more electronics production to the West. Primarily intended to attract U.S. manufacturing, the law also prevents recipients of the funding from increasing their semiconductor manufacturing footprint in China.

With the new investment, Taiwan-based TSMC, the world’s largest semiconductor producer, is expanding plans for its manufacturing plants in Arizona. The company said it will build a third manufacturing unit in addition to the two currently being built, and will manufacture chips with a resolution of 2 nanometers or more advanced. The company had previously said it would invest About 40 billion dollars To establish factories in the United States

TSMC said its first manufacturing unit is scheduled to start producing chips under the 4nm process in the first half of 2025; The second factory will produce 3nm and 2nm chips 2028; The third plant will begin manufacturing 2-nanometer and more advanced chips toward the end of the decade.

TSMC is investing more than $65 billion through these projects in the United States, and the company said in a statement that the investment makes this the largest direct investment ever by a foreign entity in a new project in the United States.

TSMC Arizona will sell its chips to customers in the United States, including AMD, Apple, Nvidia and Qualcomm. The company expects the three units will create about 6,000 direct high-tech, high-wage jobs, and more than 20,000 construction jobs.

The White House said last month that it had signed an agreement with the Commerce Department to give Intel up to $8.5 billion to support production in the United States.

Intel Corporation It could receive nearly $20 billion in grants and loans From chip law and science to semiconductor manufacturing. Meanwhile, Samsung, which announced an additional $17 billion investment in Taylor, Texas, is expected to receive more than $6 billion in grants for its chip facility in Texas.