U.S. Secures $6.6 Billion Deal with TSMC for Arizona Chip Facilities

The United States government has finalized an agreement to grant Taiwanese semiconductor manufacturer TSMC up to $6.6 billion in funding to construct advanced chip production facilities in Arizona.

This deal, announced by President Joe Biden, is expected to stimulate $65 billion in private investment, resulting in the construction of three state-of-the-art plants.

The development is aimed at bolstering U.S. semiconductor capabilities which currently do not include onshore production of leading-edge chips.

Commerce Secretary Gina Raimondo emphasized the national security significance of manufacturing these critical components domestically, given their applications in AI, quantum computing, military technology, and high-performance electronics.

The first plant is slated to be operational by early 2025, with the three facilities collectively producing multiple millions of advanced logic chips for use in cutting-edge technology such as 5G and AI.

The initiative is anticipated to create approximately 6,000 jobs.

While the U.S. has also pledged up to $5 billion in loans to TSMC, it is part of a broader effort under the CHIPS Act aiming to restore the country's stature in global semiconductor production, as it used to produce almost 40% of the world's chips but now only accounts for about 10%.

The announcement comes just before President-elect Donald Trump assumes office, amidst his criticism of the CHIPS Act's effectiveness.

TSMC shares saw a minor decline of 0.6% in New York trading following the news.