TSMC is set to secure over $5 billion in federal grants for a chipmaking project in Arizona. This development aligns with President Biden’s efforts to revitalize American semiconductor manufacturing.
Negotiations with the Commerce Department involve around $28 billion in grants earmarked for advanced factories.
TSMC, Intel Corp., Micron Technology Inc., and Samsung Electronics Co. are all in line for multi-billion dollar awards from this pool. However, specific amounts are still subject to change.
South Korea’s Samsung has reportedly discussed additional US investments alongside its $17 billion Texas factory project.
The Chips Act, with $39 billion in direct grants and $75 billion in financing options, aims to incentivize chipmakers to establish production facilities in the US.
Official announcements for major chipmakers are expected by the end of this month.
Earlier awards have been granted to firms focusing on older-generation semiconductors.
TSMC, a key supplier for Apple Inc. and Nvidia Corp., is investing $40 billion in constructing two fabrication facilities in Arizona, a region pivotal for the chip industry and a significant political focal point in the 2024 presidential election.
The Phoenix site encountered numerous setbacks, beginning with TSMC’s announcement in July of a production delay at the first factory until 2025 due to a shortage of skilled workers for installing their most advanced equipment. This sparked a prolonged dispute with local labor unions, culminating in a formal labor agreement in December.
Earlier this year, TSMC revealed a production delay at its second facility of up to two years, emphasizing that the level of technology implemented would hinge on the support received from the US government.
Intel, TSMC’s primary American competitor, is reportedly negotiating for over $10 billion in federal incentives, comprising grants and loans. It’s been indicated that at least $3.5 billion will be in the form of direct grants.
Micron, on the other hand, has a project in Idaho and has announced plans to construct up to four facilities in New York. The firm’s award is expected to back the first two of these New York factories, as Commerce Secretary Gina Raimondo prioritizes projects slated to commence production by the end of the decade. Micron’s remaining two factories in the state are not projected to be operational until 2041, as stated in a recent federal filing.