These plants are projected to produce millions of advanced logic chips for applications in 5G/6G smartphones, autonomous vehicles, high-performance computing, and artificial intelligence.
The U.S. Department of Commerce has finalized a $6.6 billion funding award under the CHIPS and Science Act to Taiwan Semiconductor Manufacturing Company (TSMC). This funding will support TSMC’s investment in three advanced semiconductor fabrication plants in Phoenix, Arizona, with the first facility expected to commence operations next year. Around 6,000 direct employment and more than 20,000 jobs in the construction area will be created from this investment, claims the Commerce Department.
In addition to the direct funding, TSMC is eligible for up to $5 billion in government loans, facilitating its total investment of over $65 billion in the Arizona facilities. These plants are projected to produce millions of advanced logic chips for applications in 5G/6G smartphones, autonomous vehicles, high-performance computing, and artificial intelligence. The disbursement of these funds will be contingent upon TSMC meeting specific project milestones, though detailed timelines for these milestones have not been publicly disclosed.
This award represents the largest foreign direct investment in a new manufacturing project in U.S. history. The CHIPS and Science Act, enacted in 2022, aims to bolster domestic semiconductor manufacturing and reduce reliance on foreign supply chains. TSMC’s Arizona project is only the second award finalized under this act, highlighting the strategic importance of semiconductor production to U.S. economic and national security interests.
In September 2024, the U.S. The Department of Commerce finalized a $123 million grant to Polar Semiconductor, marking the first award under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities. The Fab 1 is sThe Commerce Department also offered further details on the types of chips TSMC will produce at the sites.
The Fab 1 will manufacture 4-nanometer chips and 5-nanometer FinFET process technologies, while Fab 2 will focus on 3-nanometer FinFET process technologies and A16 and 2-nanometer nanosheet process technologies, according to a National Institute of Standards and Technology fact sheet. The Fab-2 is expected expected to commence production in 2028, Fab 2 will produce the world’s most advanced 2-nanometer nanosheet process technology, and Fab-3 decided to start production by the end of the decade, this facility will produce 2-nanometer or more advanced process technologies, depending on customer demand.
Most importantly, TSMC’s A16 technology represents a significant advancement in semiconductor manufacturing, integrating nanosheet transistors with an innovative backside power delivery system known as Super Power Rail (SPR). This combination enhances logic density and performance by dedicating front-side routing resources exclusively to signal transmission, thereby improving power delivery and reducing voltage drop (IR drop).
President Joe Biden has described the recent award as “one of the most critical milestones yet in the implementation of the bipartisan CHIPS & Science Act.” This statement underscores the administration’s commitment to bolstering domestic semiconductor manufacturing and technological innovation.
