TSMC, the world’s largest chipmaker, has announced plans to build a third facility in Arizona, marking a significant expansion of its chip manufacturing capabilities in the United States. The Biden administration has applauded the move, citing its importance for national security and economic growth.
Under the CHIPS and Science Act, the U.S. Commerce Department will provide up to $6.6 billion in direct funding to TSMC to support its investment in Arizona. This funding will enable TSMC’s subsidiary, TSMC Arizona, to invest over $65 billion in three greenfield fabs in Phoenix. These facilities will focus on manufacturing the most advanced chips in the world, including 2-nanometer semiconductors.
President Biden emphasized the need to reduce the country’s reliance on imported chips and increase domestic production. He expressed concerns about the vulnerabilities exposed during the pandemic when the shortage of semiconductor chips disrupted various industries, particularly automotive. By producing 20% of the world’s leading-edge semiconductors by 2030, the U.S. aims to strengthen its supply chains and improve its economic and national security.
Commerce Secretary Gina Raimondo hailed TSMC’s investment as a significant development for America’s national security. She highlighted that TSMC will be producing the most advanced semiconductor chips on American soil, which will have far-reaching implications for industries such as consumer electronics, automotive, high-performance computing, and the Internet of Things.
TSMC’s investment in Arizona is not only beneficial for the U.S. economy but also for its customers. With companies like AMD, Apple, Nvidia, and Qualcomm relying on TSMC’s chips, having manufacturing facilities in the U.S. will enhance their supply chain resilience and reduce potential disruptions caused by global events.
The CHIPS and Science Act, signed into law by President Biden, provides $53 billion in subsidies to chipmakers for building semiconductor plants across the country. This legislation aims to reduce reliance on imported chips and improve competition with China. Lael Brainard, director of the White House National Economic Council, emphasized that TSMC’s investment is critical for U.S. economic security, as it enables the country to have control over its supply chains and avoid price spikes and long wait times.
In addition to the direct funding, TSMC’s investment in Arizona is expected to create thousands of high-tech jobs, both directly and indirectly. The announcement also includes $50 million to support local talent development and training programs, providing more individuals with access to high-quality job opportunities.
However, TSMC has faced some delays in its plans. The opening of the first facility in Arizona has been pushed back to 2025, and the timeline for the second facility has been changed to 2027 or 2028. Despite these setbacks, TSMC remains committed to its investment and views its U.S. operations as crucial for supporting its American customers.
Overall, TSMC’s expansion in Arizona represents a significant step towards strengthening the U.S. chip manufacturing industry. With increased domestic production of advanced semiconductor chips, the country aims to enhance its economic and national security while reducing its reliance on imported chips. This investment will not only benefit TSMC but also its customers and the broader American economy.
