The US Department of Commerce has offered semiconductor manufacturer TSMC Co. $6.6 billion from the Science and CHIPS Act of 2022 to support its efforts to build chip plants in Arizona.
Under the preliminary non-binding terms, the Commerce Department would provide the money to TSMC subsidiary TSMC Arizona Corp. in direct funding to supplement the estimated $65 billion it is spending on projects in Phoenix. The program also plans to provide TSMC Arizona with up to $5 billion in loans, and the company said it plans to seek a tax credit for 25 percent of certain capital costs.
Two TSMC manufacturing plants, or fabs, are being built, led by a team that includes CTCI Americas Inc. and Austin Industries. Along with the funding announcement, TSMC also said it would build a third factory in Phoenix. The first factory is scheduled to start operating in the first half of next year, followed by the second factory in 2028.
TSMC estimates that the projects as a whole will involve about 20,000 construction jobs.
The chipmaker is also in the design phase of an industrial water reclamation plant with the goal of “near-zero liquid discharge” for its Arizona factories.
Mark Liu, president of Taiwan-based TSMC, said in a statement that “the company’s U.S. operations allow us to better support our U.S. customers.”
The funding comes from a CHIPS Act program designed to boost domestic semiconductor production. The law set aside $39 billion for the construction, expansion and modernization of factories.
The Commerce Department’s funding offer to TSMC is the second largest it has made to date under the CHIPS program. Last month, officials announced they had reached preliminary terms with Intel to provide $8.5 billion in direct financing, along with up to $11 billion in loans. Commerce Secretary Gina Raimondo said it would be the largest amount of money provided by the program. Officials have also offered financing to GlobalFoundries, BAE Systems Inc. and Microchip Technology Inc. through the program.
Chip shortages during the height of the coronavirus pandemic caused supply chain problems for manufacturers in various sectors. TSMC supplies technology companies such as AMD, Apple, Nvidia, Qualcomm and others, and Commerce Department officials said TSMC factories would help strengthen domestic supply chains.
“The cutting-edge semiconductors that will be manufactured here in Arizona are critical to the technology that will define global economic and national security in the 21st century, including AI and high-performance computing,” Raimondo said in a statement.
