Commerce Department signs $6.6 billion agreement with Taiwanese semiconductor manufacturer 

WASHINGTON (CN) — The Biden administration signed an agreement with a Taiwanese semiconductor manufacturer on Monday to provide $6.6 billion in federal funding for its project in Phoenix.

The money, which comes from the CHIPS and Science Act, will boost TSMC Arizona Corp.’s planned investment of $65 billion in three leading-edge fabs — the specialized factories where semiconductors are made.

“TSMC’s renewed commitment to the United States, and its investment in Arizona represent a broader story for semiconductor manufacturing that’s made in America and with the strong support of America’s leading technology firms to build the products we rely on every day,” President Joe Biden said in a statement.

TSMC, which manufactures 90% of the world’s leading-edge logic chips, is a subsidiary of Taiwan Semiconductor Manufacturing Co. Limited. The project would create an estimated 6,000 manufacturing jobs and 20,000 construction jobs.

TSMC Chair Mark Liu said the federal funding will boost its “unprecedented investment” in Arizona.

“Our U.S. operations allow us to better support our U.S. customers, which include several of the world’s leading technology companies,” he said. “Our U.S. operations will also expand our capability to trailblaze future advancements in semiconductor technology.”

TSMC was already working on two manufacturing facilities and the money will support a third. Arizona Senators Kyrsten Sinema and Mark Kelly said one of the plants will produce the most advanced microchips ever made in the United States.

“Today’s TSMC investment — fueled by our bipartisan CHIPS and Science law — is making transformational investments in our state, creating strong Arizona careers, protecting our national security, and strengthening Arizona’s leadership in semiconductor manufacturing,” Sinema said.

The Commerce Department will also make about $5 billion in loans available for TSMC’s project.

The project will support the Department of Commerce’s goal of the U.S. producing 20% of the world’s semiconductor chips by 2030.

“The leading-edge semiconductors that will be made here in Arizona are foundational to the technology that will define global economic and national security in the 21st century, including AI and high-performance computing,” Commerce Secretary Gina Raimondo said.

Arizona Congressman Ruben Gallego said the investment “will create even more good-paying jobs, grow the economy, and strengthen our national security.”

“Arizona yet again proves to be the nationwide leader in semiconductor manufacturing,” he said.

TSMC expects to start high-volume production at the facility in the first half of 2025.

Monday’s nonbinding agreement is the latest investment by the Biden administration in domestic manufacturing of semiconductors, which are used in items ranging from cell phones to refrigerators to satellites.

Last month, officials announced nearly $20 billion in grants and loans for Intel Corp. to construct and expand semiconductor facilities in Arizona, Ohio, New Mexico and Oregon, to create 30,000 jobs.

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