U.S. Hands $11 Billion in Loans and Grants to TSMC

Chipmaking giant Taiwan Semiconductor Manufacturing Company (TSMC) will receive $11.6 billion in loans and grants from the U.S. government to expand its domestic foundry capabilities under the CHIPS and Science Act.

“The CHIPS and Science Act provides TSMC the opportunity to make this unprecedented investment and to offer our foundry service of the most advanced manufacturing technologies in the United States,” TSMC chairman Dr. Mark Liu said. “Our U.S. operations allow us to better support our U.S. customers, which include several of the world’s leading technology companies. Our U.S. operations will also expand our capability to trail-blaze future advancements in semiconductor technology.”

TSMC is the world’s biggest chip manufacturer. It’s already building two chipmaking foundries in the United States, and this new investment will help it start a third; all are or will be located in Arizona, a state with dramatic water supply issues that’s been experiencing drought conditions for almost two decades. But TSMC claims that its Arizona-based facilities will achieve a 90 percent water recycling rate, and it will build an industrial water reclamation plant with a design goal of achieving “near zero liquid discharge”, to return all of the water it discharges back into the facility.

Under the terms of the latest deal, TSMC will receive a proposed $6 billion in direct funding and up to $5 billion in loans. The firm will also take advantage of various other financial incentives, including U.S. Treasury Department Investment Tax Credits of up to 25 percent of the qualified capital expenditures in Arizona. All told, TSMC now plans to invest $65 billion in the U.S., up from its previous goal of $40 billion.

The three foundries are expected to generate 6,000 direct, high-wage jobs, and TSMC says they will help the U.S. rebuild its semiconductor ecosystem and build world-class, cutting-edge chips domestically. The first of the three fabs is expected to begin producing 4 nm chipsets in the first half of 2025, while the second will target 2 and 3 nm chipsets, with production beginning in 2028. The newly announced third fab will also product 2 nm chipsets and is targeting “the end of the decade.”

TSMC isn’t the only chip manufacturer to benefit from the U.S. CHIPS and Science Act, of course: Intel has its own $20 billion deal, while Micro and Samsung are both expected to receive several billion dollars each in the coming weeks.