Global Chip Race Intensifies as TSMC Secures Major US Subsidy for Arizona Plants

Taiwan Semiconductor Manufacturing Company (TSMC) has secured a major funding deal with the United States government. The agreement was announced on Monday. It involves up to $6.6 billion in direct grants for TSMC’s advanced semiconductor fabrication plants in Arizona.

According to Reuters, the deal also includes about $5 billion in proposed loans. This substantial subsidy is a core part of the CHIPS and Science Act. The goal is to boost domestic production of the world’s most advanced microchips.

Investment to Exceed $65 Billion in Arizona Complex

The new funding will support TSMC’s expanded investment in the state. The company now plans to invest more than $65 billion in its Arizona campus. This is one of the largest foreign direct investments in U.S. history.

TSMC will build a third fabrication plant, or “fab,” in Phoenix. This new facility will produce the world’s most advanced 2-nanometer or newer chips. Production is slated to begin by the end of the decade.

This move directly strengthens America’s supply chain security. Advanced chips are vital for everything from smartphones to fighter jets. Reducing reliance on Asian manufacturing has become a top geopolitical priority.

Strategic Shift Reshapes Global Semiconductor Landscape

The deal marks a significant strategic shift for TSMC. The firm has long concentrated its most advanced manufacturing in Taiwan. Building cutting-edge capacity in Arizona diversifies its global footprint.

The U.S. Commerce Department stated this investment would support over 25,000 construction and factory jobs. It also aims to create thousands of high-paying tech positions. TSMC’s first Arizona fab is expected to begin production in 2025.

This development intensifies the global competition for chip dominance. The United States is actively competing with China and the European Union in subsidizing local production. The success of these Arizona fabs is critical for the broader CHIPS Act vision.

The landmark subsidy for TSMC’s Arizona plants is a pivotal moment in the global chip race. It brings the world’s leading chipmaker deeper into the U.S. industrial base. This move fundamentally alters the semiconductor supply chain for decades to come.

Info at your fingertips

Q1: How much funding did TSMC get from the U.S.?

TSMC secured up to $6.6 billion in direct grants. The deal also includes roughly $5 billion in proposed low-cost government loans.

Q2: Where will TSMC build new plants in America?

All new advanced fabrication plants will be built in Phoenix, Arizona. The company is developing a massive semiconductor campus there.

Q3: What technology will the Arizona plants produce?

The third new fab will produce 2-nanometer or more advanced chips. These are the most powerful semiconductors required for future AI and computing.

Q4: Why is the U.S. government subsidizing TSMC?

It aims to onshore advanced chip manufacturing for economic and national security. The goal is to reduce critical dependence on supply chains concentrated in Asia.

Q5: When will the first Arizona factory start production?

TSMC’s first Arizona fab is scheduled to begin chip production in 2025. The newly announced third fab will start operations by 2030.

Q6: How many jobs will this project create?

Officials estimate over 25,000 construction and manufacturing jobs. This includes several thousand high-wage technical and engineering positions.