In a significant move toward revitalizing American semiconductor manufacturing, Taiwan Semiconductor Manufacturing Co. TSMC is reportedly on track to secure more than $5 billion in federal grants to support a chipmaking project in Arizona. This development marks a major milestone in President Joe Biden’s efforts to bolster domestic semiconductor production and reduce reliance on overseas manufacturers.
While the award has not yet been finalized, sources familiar with the matter revealed that negotiations between TSMC and the Commerce Department are ongoing. Additionally, it remains uncertain whether TSMC will also utilize loans and guarantees offered under the 2022 Chips and Science Act.
TSMC is among several leading-edge chipmakers engaged in discussions with the Commerce Department over a pool of approximately $28 billion in grants earmarked for advanced factories. Alongside TSMC, Intel Corp., Micron Technology Inc., and Samsung Electronics Co. are expected to receive multi-billion dollar awards from this pool, although specific amounts are subject to change.
In response to inquiries, TSMC stated that it “has been making steady progress in productive ongoing discussions with the US government on incentive funding.” However, both the Commerce Department and the White House declined to comment on the matter.
Meanwhile, South Korea’s Samsung is reportedly considering additional investments in the United States in addition to the $17 billion allocated for a new factory in Texas. These discussions aim to bolster Samsung’s eligibility for incentives but have yet to yield official statements from the company.
The Chips Act, which set aside a total of $39 billion in direct grants and $75 billion in financing options, aims to entice chipmakers to establish manufacturing facilities in the United States, shifting production away from Asia. Officials are targeting announcements for major advanced chipmakers by the end of the month, with TSMC’s investment in Arizona expected to significantly bolster the nation’s chip manufacturing capacity.
TSMC’s investment in Arizona, totaling $40 billion for two fabrication facilities, underscores the state’s importance as a hub for the chip industry and a focal point in the political landscape, particularly leading up to the 2024 presidential election.
As discussions continue and agreements are finalized, the influx of funding into the semiconductor industry signals a pivotal moment for American technological competitiveness and underscores the critical role played by semiconductor manufacturers in shaping the future of technology and innovation.