Taiwan Semiconductor Manufacturing Co.’s (TSMC) Arizona subsidiary is set to receive up to $6.6 billion in U.S. government loans under a preliminary agreement announced by the Administration on Monday. The funding will help the world’s top chipmaker build factories in Arizona, expanding President Joe Biden’s effort to boost domestic production of critical technology, reports Bloomberg.
Under the preliminary agreement, TSMC will build a third factory in Phoenix, adding to two facilities in the state that are expected to begin production in 2025 and 2028. In total, the package will support more than $65 billion in investments at the three plants by TSMC, the go-to chip maker for cell phones and other products.
The funding is a result of the U.S. CHIPS and Science Act, according to the nonbinding agreement. The Taiwanese multinational semiconductor company is also eligible for around $5 billion in proposed loans under the CHIPS Act.
U.S. Commerce Secretary Gina Raimondo said at a press briefing that the agreement was “huge,” adding that the partnership with TSMC will bring “the manufacturing of the world’s most advanced chips to American soil,” reports MSNBC. According to Raimondo, the funds will include $50 million to train and develop local talent in Arizona, with TSMC Arizona having already created more than 25,000 jobs and attracted 14 semiconductor suppliers for the state.
Passed in August 2022, the CHIPS Act is an almost $53 billion package aimed at building the U.S. domestic semiconductor industry to boost the country’s economy and better compete with rivals such as China for national security purposes. The legislation provides billions in incentives for companies to produce chips in the U.S., on the condition that they do not expand certain semiconductor manufacturing operations in China and other countries deemed a national security risk.
The agreement with the Taiwanese company marks the latest investment through the CHIPS and Science Act. The White House has announced four other preliminary agreements with companies for CHIPS funding, including with Intel, GlobalFoundries and Bae Systems, notes The Hill.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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