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The Biden administration’s announcement comes shortly before President-elect Donald Trump takes office. The CHIPS Act, a significant law enacted under Biden with the goal of bolstering the US semiconductor industry, has recently come under fire from Trump.
Before a new administration takes office, officials announced Friday that the United States will give Taiwanese chip giant TSMC up to $6.6 billion in direct funding to help build multiple plants on US soil.
“Today’s final agreement with TSMC—the world’s leading manufacturer of advanced semiconductors—will spur $65 billion of private investment to build three state-of-the-art facilities in Arizona,” said President Joe Biden in a statement.
The Biden administration’s announcement comes shortly before President-elect Donald Trump takes office. Trump has recently criticised the CHIPS Act, a major law passed during Biden’s tenure aimed at strengthening the US semiconductor industry.
Even though the US government has announced more than $36 billion in grants under this act, including the one given to TSMC, the majority of the money is still in the due diligence stage and has not yet been released.
However, after a deal is completed, money can begin to flow to businesses that have achieved specific goals.
After Polar Semiconductor, TSMC is the second business to complete the deal.
“This is the first time ever that we will be able to say we will be making these leading-edge chips in the United States,” Commerce Secretary Gina Raimondo told reporters Thursday. “At the moment, the United States does not make on our shores any leading-edge chips.”
“I want to remind everyone that these chips are the brains behind AI and quantum computing. These chips are found in high-tech military hardware,” Raimondo continued.
She pointed out that producing these chips domestically helps mitigate a national security risk.
According to Biden, the first of TSMC’s three facilities will be completely operational by the beginning of 2025.
“Manufacture tens of millions of leading-edge logic chips that will power products like 5G/6G smartphones, autonomous vehicles, and high-performance computing and AI applications,” according to the Commerce Department, when the three Arizona facilities are operating at full capacity.
The first TSMC plant in Arizona’s “early production yields are on par with similar factories in Taiwan,” the statement continued.
The investment is anticipated to create about 6,000 direct manufacturing jobs.
According to a senior US official who spoke to reporters on condition of anonymity, TSMC is expected to receive at least $1 billion this year.
The U.S. is giving TSMC Arizona up to $5 billion in proposed loans in addition to the $6.6 billion in direct funding.
The United States used to produce almost 40% of the world’s chips, but today it only makes about 10% of them, and none of them are the most sophisticated.
Early on Friday, TSMC’s stock fell 0.6 percent in New York.