The Biden-Harris Administration has awarded Taiwan Semiconductor Manufacturing Company (TSMC) $6.6 billion under the CHIPS and Science Act. This funding will support the development of three advanced chip fabrication facilities in Arizona.
The award follows a preliminary grant in April and aims to strengthen the American semiconductor supply chain and reduce reliance on Asian manufacturing.
Advanced Chip Production in Arizona
TSMC's Arizona facilities will produce chips using advanced process technologies, ranging from 5nm to the cutting-edge 1.6nm (A16) node. The first fab is expected to begin production in mid-2025, focusing on 5nm and 4nm chips commonly used in GPUs and high-performance computing.
The second facility will manufacture 3nm chips, while the third, slated for production by the end of the decade, will handle 2nm production. This marks a shift from earlier plans where 2nm production was expected at the second facility.
The $6.6 billion direct funding is supplemented by $5 billion in loans, contributing to the total $65 billion capital expenditure for the project—the largest foreign direct investment in a US greenfield project.
Impact on the US Semiconductor Ecosystem
This investment is a significant step towards bolstering US semiconductor manufacturing. Domestic production of 4nm and 5nm chips will aid American companies like NVIDIA and AMD in securing domestic chip supplies. It's also part of a broader effort to reduce dependence on the Asian semiconductor ecosystem.
