As President Joe Biden’s term in office comes to an end, his administration is giving nearly $7 billion to a company that plans to manufacture semiconductors in Phoenix, Ariz.
This investment is expected to create approximately 6,000 direct manufacturing jobs and more than 20,000 total unique construction jobs.
In a Friday press release, the U.S. Department of Commerce awarded TSMC Arizona Corporation (a subsidiary of Taiwan Semiconductor Manufacturing Company Limited) $6.6 billion in direct funding under the CHIPS Incentives Program. Biden announced the CHIPS Science Act of 2022 in August of that year, providing the Department of Commerce with $50 billion for programs to strengthen semiconductor research and development.
“It will strengthen American manufacturing, supply chains, and national security, and invest in research and development, science and technology, and the workforce of the future to keep the United States the leader in the industries of tomorrow, including nanotechnology, clean energy, quantum computing, and artificial intelligence,” said the White House at the time.
Shortly after signing the CHIPS Act, Biden traveled to Arizona and announced TSMC’s plans to invest in the U.S.
“On that day, I spoke about how the United States invented semiconductors and used to manufacture nearly 40% of the world’s chips, but now makes closer to 10% of them and none of the most advanced chips,” said the president. “I came to office determined to change that, and we have since delivered on that promise, catalyzing nearly $450 billion in private investment in semiconductors, creating over 125,000 new construction and manufacturing jobs, and reshoring critical technologies to bolster our national and economic security.”
In Phoenix, TSMC plans to invest more than $65 billion in three “state-of-the-art” facilities. As the company completes milestones, the department will disburse the funding. Biden said that the first of the facilities should open next year.
“For the first time in decades an [American] manufacturing plant will be producing the leading-edge chips used in our most advanced technologies – from our smartphones, to autonomous vehicles, to the data centers powering artificial intelligence,” he said. “Today’s announcement is among the most critical milestones yet in the implementation of the bipartisan CHIPS & Science Act, and demonstrates how we are ensuring that the progress made to date will continue to unfold in the coming years, benefitting communities all across the country.”
With the investment into TSMC Arizona, the government’s goal is to “strengthen U.S. economic and national security by helping to provide a reliable domestic supply of the chips that will underpin the 21st century technology economy,” powering everything from artificial intelligence to high-performance computers. When all three fabs are up-and-running, they are expected to produce tens of millions of leading-edge logic chips that power things like smartphones and autonomous vehicles.
“Because of President Biden and Vice President [Kamala] Harris, the most advanced semiconductor technology on the planet will be made in America, creating thousands of jobs in the process,” said U.S. Secretary of Commerce Gina Raimondo.
Already, early production yields at the first TSMC plant in Arizona are on par with similar factories in Taiwan, according to the Commerce Department. These include its A16 technology – the most advanced semiconductor technology in the world. These are integral parts of central processing units for servers in large-scale datacenters and of specialized graphics processing units used for machine learning.
Per the Commerce Department, funding doesn’t end at the $6.6 billion announced Friday. Going forward, the CHIPS Program Office is also expected to provide up to $5 billion in proposed loans as part of the $75 billion in loan authority provided by the CHIPS and Science Act to TSMC Arizona.