The U.S. Department of Commerce finalized a CHIPS Incentives Program award of up to $6.6 billion in direct funding to TSMC Arizona Corporation on November 15, 2024, supporting the company’s planned construction of three greenfield leading-edge semiconductor fabrication facilities in Phoenix, Arizona. TSMC Arizona is a subsidiary of Taiwan Semiconductor Manufacturing Company Limited. The award follows a preliminary memorandum of terms announced April 8, 2024, and the completion of the department’s due diligence. Funds will be disbursed as TSMC Arizona meets project milestones.
What it means
The three Phoenix fabs are expected to produce leading-edge chips, with early production yields at the first facility described as on par with comparable TSMC factories in Taiwan. TSMC Arizona’s planned private investment exceeds $65 billion, which President Biden described in a statement as the largest foreign direct investment in a greenfield project in U.S. history. The company said its A16 technology is the most advanced semiconductor technology in the world. The project is expected to create approximately 6,000 direct manufacturing jobs and more than 20,000 unique construction jobs. Dr. C.C. Wei, TSMC Chairman and CEO, called the finalized award “a pivotal step in strengthening the semiconductor ecosystem in the United States.”
The Commerce Department’s CHIPS Program Office will also provide TSMC Arizona up to $5 billion in proposed loans, drawn from the $75 billion in loan authority established by the CHIPS and Science Act. President Biden noted that the U.S. share of global chip manufacturing has fallen from roughly 40% to roughly 10%, and cited $450 billion in private semiconductor investment catalyzed since the start of his administration, along with more than 125,000 new construction and manufacturing jobs. Across all recipients, CHIPS for America has awarded approximately $6.72 billion and allocated over $36 billion in proposed funding spanning 20 states.
Key facts
- Direct funding awarded: up to $6.6 billion (CHIPS Incentives Program, Commercial Fabrication Facilities funding opportunity)
- Proposed loans: up to $5 billion, from the CHIPS and Science Act’s $75 billion loan authority
- TSMC Arizona planned private investment: more than $65 billion (according to the company)
- Facilities: 3 greenfield leading-edge fabs, Phoenix, Arizona
- Direct manufacturing jobs expected: approximately 6,000 (according to the company)
- Construction jobs expected: more than 20,000 unique positions (according to the company)
- Preliminary memorandum of terms announced: April 8, 2024
- CHIPS for America total awarded across all recipients: approximately $6.72 billion across 20 states, with over $36 billion in proposed funding allocated
Source: U.S. Department of Commerce / National Institute of Standards and Technology CHIPS Program Office news release (nist.gov)