TSMC Arizona and U.S. Department of Commerce Announce Up To $6.6 Billion In Proposed CHIPS Act Direct Funding

PHOENIX, AZ (April 8, 2024) – TSMC announced that the U.S. Department of Commerce and TSMC Arizona have signed preliminary terms for up to $6.6 billion in direct funding under the CHIPS and Science Act. TSMC also announced plans to build a third fab at TSMC Arizona, leveraging the most advanced semiconductor process technology in the United States.

As the company makes progress in completing its first fab, and in February 2024 celebrated a construction milestone with the last steel beam placed on its second fab, the third fab brings TSMC’s total investment to more than $65 billion, making the Phoenix site the largest foreign direct investment in Arizona history, and the largest foreign direct investments in a greenfield project in U.S. history. TSMC Arizona’s three fabs are expected to create 6,000 direct high-tech, high-wage jobs, building a workforce that will help to support a vibrant and competitive global semiconductor ecosystem that enables leading U.S. companies to gain access to domestically-manufactured, cutting-edge semiconductor products alongside a world-class semiconductor foundry.

“Arizona is an international leader in the semiconductor industry, a testament to our strong and enduring relationship with TSMC,” said Governor Katie Hobbs. “With this vital investment made possible by the CHIPS Act, this partnership will continue to thrive. We are at the forefront of our country’s economic future because of our high-skilled workforce and dynamic economic engine, and TSMC’s growth and investment right here in Arizona will continue to show the world that our state is the best place for businesses to invest. I want to thank ACA President Sandra Watson for her essential work cementing Arizona as the silicon desert and TSMC Chairman Mark Liu for his partnership with our state. Some of the world’s most advanced chips will be made here in Arizona at TSMC, and this investment underscores our commitment to innovation and technological leadership.”

“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,” said TSMC Chairman Dr. Mark Liu. “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 trailblaze future advancements in semiconductor technology.”

“We are honored to support our customers who have been pioneers in mobile, artificial intelligence and high-performance computing, whether in chip design, hardware systems or software, algorithms, and large language models,” said TSMC CEO Dr. C.C. Wei. “They are the innovators driving demand for the most advanced silicon that TSMC can provide. As their foundry partner, we will help them unleash their innovations by increasing capacity for leading-edge technology through TSMC Arizona. We are thrilled by the progress of our Arizona site to date and are committed to its long-term success.”

TSMC Arizona’s first fab is on track to begin production leveraging 4nm technology in the first half of 2025. The second fab will produce the world’s most advanced 2nm process technology with next-generation nanosheet transistors in addition to the previously announced 3nm technology, with production beginning in 2028. The third fab will produce chips using 2nm or more advanced processes, with production beginning by the end of the decade. Each of the three fabs, like all of TSMC’s advanced fabs, will have cleanroom area approximately double the size of an industry standard logic fab.

“It’s an exciting day for Arizona, where we are leading the way in bringing the most advanced microchip manufacturing back to America,” said Senator Mark Kelly. “This grant and TSMC’s commitment to increase their presence in our state are going to create thousands of great-paying jobs, many of which don’t require a four-year degree, and get more workers the skills they need to start these careers. This will also strengthen our national security by bringing critical technology supply chains back from overseas and reinforcing ties between the United States and Taiwan. Today’s exciting steps forward are the product of the hard work we did to pass the CHIPS Act and the hard work that Mayor Gallego and our state and local economic development leaders did to bring TSMC to Phoenix.”

“Today’s TSMC investment – fueled by our bipartisan CHIPS and Science law – is making transformational investments in our state, creating strong Arizona careers, protecting our national security, and strengthening Arizona’s leadership in semiconductor manufacturing,” said Senator Kyrsten Sinema.

“Today’s announcement is yet another important milestone for Phoenix as we fast become the hub of the nation’s semiconductor industry,” said Phoenix Mayor Kate Gallego. “TSMC makes the world’s most advanced semiconductor technology, and thanks to this monumental investment, the company will be able to continue expanding in our city—creating thousands of high-wage jobs and fueling economic growth for generations. Phoenix is proud to lead the Biden administration’s charge to bring back American manufacturing, and we stand ready to deliver results. I am grateful to our Congressional delegation, business leaders, and education partners who helped advocate for and ultimately pass the CHIPS Act. This was truly a team effort, and I look forward to the positive impact this investment will have on the entire region.”

“We are proud to celebrate today’s historic funding announcement and TSMC’s continued high-tech growth in Arizona,” said Sandra Watson, President and CEO of the Arizona Commerce Authority. “TSMC’s expansion adds thousands of new jobs to Arizona’s rapidly growing semiconductor ecosystem, bolsters our state’s leadership in advanced chip technology, and represents a new milestone for U.S. supply chain resiliency. We’re sincerely grateful to TSMC for their continued commitment to and investment in Arizona and thank the Biden Administration, Governor Hobbs, and all our partners for their collaboration and leadership.”

“With the most advanced chips in the world, TSMC is ushering a new era of national solidity through domestic semiconductor production with backing from the CHIPS funding,” said Chris Camacho, President and CEO of the Greater Phoenix Economic Council. “Greater Phoenix has emerged as the heartbeat of U.S. advanced manufacturing capabilities, and the continued partnership and collaboration between the region and company will lift both to unprecedented heights.”

“Congratulations to TSMC on this award, which underscores the value of the CHIPS Act and will help solidify Arizona’s place as the country’s leading hub for semiconductor manufacturing,” said Danny Seiden, President and CEO, Arizona Chamber of Commerce and Industry. “Arizona’s economy and competitive standing are made stronger by TSMC’s contributions, and we look forward to TSMC’s expanded investment and continued growth in the state.”

TSMC practices green manufacturing and aims to serve as a global standard for eco-friendly corporations with constant innovations in energy efficiency, water conservation, waste management, and air pollution control. TSMC Arizona’s fabs are designed and built with that same global vision and aims to achieve a 90% water recycling rate. The company has started the design phase of building an industrial water reclamation plant with a design goal of achieving “near zero liquid discharge”, bringing nearly every drop of water back into the facility.

In addition to the proposed $6.6 billion in direct funding, the PMT also proposes to provide TSMC with up to $5 billion in loans. TSMC plans to apply for U.S. Treasury Department Investment Tax Credits of up to 25% of the qualified capital expenditure at TSMC Arizona. The company remains committed to its long-term financial goals, which are 15-20% revenue compound annual growth rate (CAGR) in USD terms, 53% and higher gross margin, and 25% and higher return on equity (ROE).