Key Takeaways
- The CHIPS Act provided TSMC with $6.6 billion in direct funding to construct three semiconductor production facilities in Arizona.
- After years of outsourcing, the investment seeks to bring advanced chip manufacturing capabilities back to the United States.
- Future nodes like 2nm and A16 are planned for later fabs, while TSMC’s 5nm and 4nm process nodes will be used in the first Arizona fab for high-performance circuits like GPUs.
In a final act before he left office, President Biden just gave TSMC $6.6 billion in CHIPS Act funds.
President Joe Biden has announced that TSMC will get $6.6 billion in direct funding under the CHIPS and Science Act to create not one but three new state-of-the-art semiconductor plants in Arizona. This might be a significant boost for US chipmaking.
Following a lesser grant in April, the Commerce Department spent months making sure TSMC met all of the conditions of the CHIPS Act. This financing follows that grant. From the cutting-edge 5nm manufacturing node to the minuscule 1.6nm “A16” node that hasn’t even gone into production yet, the funds will help factories make chips.
In August 2022, President Joe Biden signed the CHIPS Act into law. The White House has made it clear that the Act’s main goal is to bring vital semiconductor manufacturing capabilities back to the United States after they have been moving abroad for years. It is deemed a national security danger to be so dependent on Asian sources for cutting-edge semiconductors. The money is intended to close that gap.
Regarding TSMC’s precise intentions, the US division of the business will begin production at the Arizona facility somewhere in the middle of 2025. Semiconductors based on TSMC’s 5nm and 4nm process nodes—the kind of cutting-edge technology often utilized to make high-end GPUs and other high-performance silicon—will be produced at this first fab.
Beyond this, it’s important to note that a second factory in Arizona was originally supposed to create TSMC’s cutting-edge 2nm “nanosheet” transistor technology. However, the most recent update moves the fabrication of next-generation 2nm chips—including those that will employ the A16 nodes—to a third site. That third factory probably won’t produce anything until the end of the decade.
To construct this enormous new semiconductor manufacturing hub in the United States, TSMC is spending an astounding $65. The Biden administration is contributing $5 billion in loans to assist the investment in addition to the $6.6 billion in direct spending.
Companies like Intel are investing billions of dollars in new domestic factories for process nodes in the future, but Team Blue’s development has been sluggish. The US government is also expected to provide the business with a $8.5 billion assistance package, similar to what TSMC received. Although the financing was initially anticipated to come prior to the November elections, it appears that delays have been caused by Intel’s continued financial difficulties.
However, after decades of concentrating its advanced production in Taiwan, TSMC is making a strong commitment to bringing part of its work back to the United States.
