Taiwanese
Chip-Making Giant TSMC Gets $6.6 Billion for Arizona Project
U.S. government grant follows
billions for Intel, GlobalFoundries under the Chips Act
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TSMC,
as the company is commonly called, will invest more than $65 billion in total.
·
A
third chip factory to the manufacturing complex it started building in 2021.
·
Make
currently cutting-edge 2-nanometer chips at one of the factories there.
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TSMC,
which makes chips for the likes of Apple and Nvidia, will get the funding in
stages as its projects reach negotiated milestones.
·
The
U.S. is on track to make about 20% of the world’s cutting-edge chips by 2030.
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TSMC
pushed that timetable to 2025 in July last year, citing a shortage of skilled
workers.
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The
TSMC award is the third major one under the Chips Act after GlobalFoundries,
another contract chip maker, and Intel.
·
Micron,
a memory manufacturer building a chip plant in New York, and Samsung Electronics,
which has been growing its ambitions at a factory complex in Texas.
·
Taiwan
suffered its worst quake in 25 years on Wednesday, although TSMC said none of
its most critical equipment was affected.
Taiwan
Semiconductor Manufacturing is getting up to $6.6 billion from the U.S. government
for a factory complex under construction in Phoenix and will expand the
operation’s scope and sophistication, part of a drive to regrow the domestic
semiconductor industry.
TSMC,
as the company is commonly called, will invest more than $65 billion in total
and add a third chip factory to the manufacturing complex it started building
in 2021, U.S. officials said. The company, the world’s largest contract chip
maker, will also make currently cutting-edge 2-nanometer chips at one of the
factories there.
“It’s
a national security problem that we don’t manufacture any of the world’s most
sophisticated chips in the United States,” Commerce Secretary Gina Raimondo
said in a briefing with reporters. She described chips as drivers of artificial
intelligence and necessary components of technologies that underpin the
economy.
TSMC,
which makes chips for the likes of Apple and Nvidia, will get the funding in
stages as its projects reach negotiated milestones. The money is also
contingent on due diligence by the Commerce Department, which is overseeing the
grant under 2022’s Chips Act.
That
act is the centerpiece of a bipartisan effort
supported by the Biden administration to bring chip-making back to the U.S. It
outlined $53 billion of grants, research funding and other incentives to
reverse the chip industry’s flight overseas in the past three decades. The U.S.
share of chip manufacturing fell to 12% in 2020 from 37% in 1990.
With
projects such as TSMC’s, the U.S. is on track to make
about 20% of the world’s cutting-edge chips by 2030, the Commerce
Department said. It called the project the largest foreign direct investment in
a new project in U.S. history.
TSMC
was one of the earliest companies to latch on to the push to do more within the
U.S., although it has said it has been slowed by labor
challenges. TSMC initially planned to start mass-producing chips in Arizona
this year, but TSMC pushed that timetable to 2025 in
July last year, citing a shortage of skilled workers. In January, it also
delayed the schedule for production at a second factory being built on the
Arizona site.
Intel,
which received $8.5 billion under the Chips Act last month, has pushed back the
construction timeline on its plant in Ohio, one of several large projects
funded under the grant program.
The TSMC award is the third major one
under the Chips Act after GlobalFoundries, another contract chip maker, and
Intel. Further large
grants are expected, including for Micron, a memory
manufacturer building a chip plant in New York, and Samsung Electronics, which
has been growing its ambitions at a factory complex in Texas.
Chip
companies have requested far more money than is available under the Chips Act
for cutting-edge manufacturing, with requests of more than $70 billion compared
with about $28 billion available, Raimondo said in February. That gap led to
“tough conversations” with companies as she pushed them to do more with less
money.
For
TSMC, the project in Arizona is a break from a footprint centered
in Taiwan. The simmering threat of a Chinese invasion and the emergence of chip
manufacturing as a geopolitical priority have pushed it to become more
geographically spread out.
Arizona
is also not susceptible to earthquakes such as the one that hit Taiwan last
week. Taiwan suffered its worst quake in 25 years on
Wednesday, although TSMC said none of its most critical equipment was affected.
The
first factory TSMC built in Arizona is expected to start production in the
first half of next year, according to the Commerce statement. Its second—which
is set to produce 2-nanometer chips—is targeted to start production in 2028,
TSMC said Monday. The third is to be built before the end of the decade,
Commerce said.
TSMC
is expected to start mass-producing 2-nanometer chips next year, and it’s
unclear whether they will remain at the cutting edge by the time the second
plant goes into production in several years.
With
the addition of the third factory and the production of more advanced chips in
Arizona, the company raised the value of its overall investment to above $65
billion from a previous figure of $40 billion.
In
addition to the $6.6 billion of grants, TSMC is to have access to up to $5
billion in government loans for its project, the Commerce Department said. The
award also includes $50 million of workforce-development funding.
The
project is expected to create more than 20,000 construction jobs and 6,000
permanent jobs, and has brought in more than a dozen suppliers to TSMC, the
department said.