TSMC has reached a preliminary agreement with the U.S. Department of Commerce to receive up to $6.6 billion in direct funding and up to $5 billion in loans under the CHIPS and Science Act. TSMC will add a third wafer fab to its Arizona project amid the latest round of U.S. government support, with investment in the region set to soar to more than $65 billion. The move marks not only the largest foreign direct investment in Arizona, but also one of the largest support programs the U.S. government plans to provide under the CHIPS Act, second only to Intel’s $8.5 billion awarded last month.
TSMC is currently equipping the first phase of its Fab 21 and is expected to start manufacturing chips using N4 and N5 (4nm and 5nm level) process technologies in the first half of 2025. TSMC’s Fab 21 Phase 2 will begin operations in 2028 and will manufacture chips at the N3 and N2 (3nm and 2nm level) production nodes. The newly announced third fab (name to be determined) will manufacture chips using 2-nanometer or higher processes and is expected to begin production by the end of the decade.
TSMC has not released the planned capacity of the new fab, noting only that it will be similar to two other fabs in Arizona, with about twice the clean room space of a typical “industry standard logic fab.” If it’s similar in size to other Arizona fabs, that strongly implies the new fab will be another MegaFab-class facility — a mid-range fab capable of producing about 25,000 wafers per month. TSMC does operate a larger fab – the 100K WSPM GigaFab – although to date they have not built any outside of Taiwan.
“The Chip and Science Act provides TSMC with the opportunity to make this unprecedented investment and provide foundry services for our most advanced U.S. manufacturing technology,” said TSMC Chairman Dr. Mark Liu. “Our U.S. operations allow us to 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 ability to pioneer future advances in semiconductor technology.”
The construction of the three plants in Arizona is expected to create approximately 6,000 direct high-tech jobs and make a significant contribution to the development of a skilled workforce. This workforce is expected to play a vital role in fostering a vibrant and competitive global semiconductor ecosystem. In addition, the project is expected to create more than 20,000 construction jobs, in addition to tens of thousands of indirect jobs related to supplier and consumer services.
AMD, Apple and NVIDIA fully support TSMC’s project and express interest in using TSMC’s US production capacity
“Today’s announcement underscores the strong commitment of Secretary Raimondo and the entire Administration to ensure that the United States plays a central role in building a more geographically diverse and resilient economy,” said AMD Chairman and CEO Lisa Su. semiconductor supply chain.” “TSMC has a long history of delivering leading manufacturing capabilities, allowing AMD to focus on what we do best, designing high-performance chips that change the world. We are committed to our partnership with TSMC and look forward to our partnership with U.S. Making our most advanced chips.”
TSMC’s Arizona joint venture has encountered obstacles, such as setbacks due to labor shortages and skepticism about U.S. government funding. As a result, production at the second plant has been postponed from 2026 to 2028. Separately, Bloomberg reports that at least one TSMC supplier has canceled its planned project in Arizona, attributing the decision to challenges in securing the workforce. To address labor issues, TSMC’s allocation includes $50 million to train the local workforce.
Source: TSMC, Bloomberg