- Taiwan Semiconductor Manufacturing Corporation (TSMC) is poised to accept more than $5 billion in federal grants from the U.S. government to build a chip manufacturing facility in Arizona.
- The contract is yet to be finalized, but marks a significant development in TSMC’s expansion plans and is in line with the US government’s push to boost domestic semiconductor production.
OUR TAKE
We are not sure how much Intel received from the chip Act, but it has been reported that the US government will give Intel about $10 billion in subsidies, of which $3.5 billion will be used to produce advanced semiconductors for military and intelligence projects, the exact amount is still to be officially confirmed. Is the U.S. government pursuing local chip manufacturing only to make local players strong?
–Fei WANG, BTW reporter
TSMC secures over $5 Billion in U.S. federal grants for Arizona chip plant
Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker, is poised to receive more than $5 billion in federal grants from the U.S. government to establish a chipmaking facility in Arizona, as reported by Bloomberg News on Friday. The award, while pending finalization, marks a significant development in TSMC’s expansion plans and aligns with the U.S. government’s efforts to boost domestic semiconductor production. The report suggests that the details of the potential utilization of loans and guarantees from the 2022 Chips and Science Act are yet to be clarified, adding an element of uncertainty to the overall financial structure of the venture.
Also read: U.S. to announce billions in subsidies for advanced chips
Also read: Intel, Nvidia, AMD: Who is going to win the AI chip race?
$40 billion total investment
TSMC, recognized for producing chips used in Apple’s iPhones, has outlined an ambitious investment plan of approximately $40 billion for its Arizona plant. This commitment stands out as one of the largest foreign investments in U.S. history, signalling TSMC’s dedication to strengthening its presence in the American semiconductor landscape. The move aligns with the U.S. CHIPS Act, passed in 2022, which allocates a substantial budget of $52.7 billion to boost semiconductor production and research and development (R&D). The U.S. government’s focus on incentivizing foreign chipmakers to establish manufacturing facilities on American soil reflects a strategic push to secure a more robust and resilient semiconductor supply chain.
TSMC’s crucial role
TSMC’s advanced manufacturing processes play a pivotal role in the production of Nvidia’s industry-leading artificial intelligence chips, underscoring the Taiwanese chipmaker’s influence in critical technology sectors. In a statement made in January, TSMC highlighted the surging demand for advanced packaging, expressing challenges in meeting customer capacity needs, which are expected to persist into the following year. The constraints on advanced packaging capacity have emerged as a central bottleneck, hindering the scale-up of the supply chain for complex AI chips. This acknowledgment sheds light on the broader industry dynamics and the imperative for sustained investments to address critical infrastructure gaps in semiconductor manufacturing.
