TSMC Secures $6.6B Funding via US CHIPS Act, introduces Arizona 2nm Fab Construction

Taiwan Semiconductor Manufacturing Company (TSMC) has struck a preliminary deal with the U.S. Department of Commerce, securing a substantial amount of funding and loans under the CHIPS and Science Act. This agreement will provide TSMC with up to $6.6 billion in direct funding and access to $5 billion in loans. In return, TSMC will expand its Arizona project by adding a third fab, bringing its total investment in the region to over $65 billion. This move marks not only the largest foreign direct investment in Arizona but also one of the most significant support packages under the CHIPS Act, second only to Intel’s recent $8.5 billion award.

TSMC is currently preparing its Fab 21 phase 1 for chip production using N4 and N5 process technologies, expected to commence in the first half of 2025. Fab 21 phase 2 is set to begin operations in 2028, manufacturing chips on N3 and N2 production nodes. The newly announced third fab, yet to be named, will produce chips on 2 nm-class processes or beyond, with production expected to start by the end of the decade.

While TSMC has not disclosed the planned capacity for the new fab, it is anticipated to be similar in size to the other two Arizona fabs. This suggests that it will likely be a mid-range facility capable of producing around 25,000 wafer starts per month. TSMC does operate larger fabs, such as the 100K WSPM GigaFab, but these have so far been limited to Taiwan.

TSMC Chairman Dr. Mark Liu expressed enthusiasm about the opportunity provided by the CHIPS and Science Act, stating that it allows TSMC to make an unprecedented investment and offer advanced manufacturing technologies in the United States. He emphasized that their U.S. operations will better support American customers and enable future advancements in semiconductor technology.

The construction of three fabs in Arizona is expected to generate approximately 6,000 high-tech jobs, contributing to the development of a skilled workforce. This workforce will play a vital role in fostering a competitive global semiconductor ecosystem. Additionally, the project is projected to create over 20,000 construction jobs and numerous indirect jobs related to suppliers and consumer services.

Leading technology companies like AMD, Apple, and nVidia have expressed their full support for TSMC’s project and have shown interest in utilizing TSMC’s capacities in the U.S. AMD Chair and CEO Lisa Su commended the commitment from Secretary Raimondo and the entire administration in creating a more diverse and resilient semiconductor supply chain. She highlighted TSMC’s track record in providing leading-edge manufacturing capabilities that have empowered AMD to focus on designing high-performance chips.

Despite TSMC’s ambitious plans in Arizona, the project has faced challenges such as labor shortages and uncertainties surrounding government funding. As a result, production at the second facility has been delayed from 2026 to 2028. Additionally, Bloomberg reported that at least one supplier for TSMC has canceled its intended project in Arizona due to difficulties in securing a workforce. To address these workforce issues, the TSMC grant includes a $50 million allocation for training the local workforce.

Sources: TSMC, Bloomberg

Background Information

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About AMD:

AMD, a large player in the semiconductor industry is known for its powerful processors and graphic solutions, AMD has consistently pushed the boundaries of performance, efficiency, and user experience. With a customer-centric approach, the company has cultivated a reputation for delivering high-performance solutions that cater to the needs of gamers, professionals, and general users. AMD's Ryzen series of processors have redefined the landscape of desktop and laptop computing, offering impressive multi-core performance and competitive pricing that has challenged the dominance of its competitors. Complementing its processor expertise, AMD's Radeon graphics cards have also earned accolades for their efficiency and exceptional graphical capabilities, making them a favored choice among gamers and content creators. The company's commitment to innovation and technology continues to shape the client computing landscape, providing users with powerful tools to fuel their digital endeavors.

  

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About Apple:

Apple Inc., known for its iconic products, was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in 1976. The company has since revolutionized the technology landscape with innovations like the Macintosh computer, iPod, iPhone, iPad, and more. for its emphasis on design, user experience, and ecosystem integration, Apple's devices and software have made a profound impact on various industries. With a commitment to quality and innovation, Apple remains a global technology leader.

  

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About Intel:

Intel Corporation, a global technology leader, is for its semiconductor innovations that power computing and communication devices worldwide. As a pioneer in microprocessor technology, Intel has left an indelible mark on the evolution of computing with its processors that drive everything from PCs to data centers and beyond. With a history of advancements, Intel's relentless pursuit of innovation continues to shape the digital landscape, offering solutions that empower businesses and individuals to achieve new levels of productivity and connectivity.

  

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About nVidia:

NVIDIA has firmly established itself as a leader in the realm of client computing, continuously pushing the boundaries of innovation in graphics and AI technologies. With a deep commitment to enhancing user experiences, NVIDIA's client computing business focuses on delivering solutions that power everything from gaming and creative workloads to enterprise applications. for its GeForce graphics cards, the company has redefined high-performance gaming, setting industry standards for realistic visuals, fluid frame rates, and immersive experiences. Complementing its gaming expertise, NVIDIA's Quadro and NVIDIA RTX graphics cards cater to professionals in design, content creation, and scientific fields, enabling real-time ray tracing and AI-driven workflows that elevate productivity and creativity to unprecedented heights. By seamlessly integrating graphics, AI, and software, NVIDIA continues to shape the landscape of client computing, fostering innovation and immersive interactions in a rapidly evolving digital world.

  

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About TSMC:

TSMC, or Taiwan Semiconductor Manufacturing Company, is a semiconductor foundry based in Taiwan. Established in 1987, TSMC is a important player in the global semiconductor industry, specializing in the manufacturing of semiconductor wafers for a wide range of clients, including technology companies and chip designers. The company is known for its semiconductor fabrication processes and plays a critical role in advancing semiconductor technology worldwide.

  

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