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TSMC to Invest $65 Billion for the Development of Semiconductor Factories in Arizona, USA

Last Updated on 08th April 2024

Taiwan Semiconductor Manufacturing Company (TSMC), currently the largest semiconductor company in the world, announced today that it has signed a non-binding preliminary memorandum of terms (PMT) with the U.S. Department of Commerce and TSMC Arizona for up to USD 6.6 billion in direct funding under the CHIPS and Science Act. This funding aims to support the construction of a new semiconductor TSMC fabrication plant in Arizona.



TSMC will invest more than USD 65 billion for the development of three greenfield semiconductor fabrication plants in the US. The first fab at TSMC Arizona is expected to commence production utilizing 4nm technology in the first half of 2025. Following this, the second fab will produce the world's most advanced 2nm process technology, incorporating next-generation nanosheet transistors alongside the previously announced 3nm technology, with production anticipated by 2028.


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As for the third fab, it will focus on producing chips using 2nm or more advanced processes, aiming to commence production by the end of this decade. Each of these fabs will feature a semiconductor cleanroom area approximately double the size of an industry-standard logic fab.


TSMC Arizona is further committing to constructing this additional third fab before the end of the decade, after initially announcing plans for two fabs in the U.S. This investment is expected to foster the establishment of a scaled, leading-edge cluster in Arizona.


The investment is projected to generate around 6,000 direct manufacturing jobs, over 20,000 unique construction jobs, and tens of thousands of indirect jobs, bolstering U.S. economic and national security by ensuring a reliable domestic supply of chips. According to Lael Brainard, a White House national economic adviser, this sizeable investment will position Arizona as a global leader for decades to come by transforming it into a hub for innovation.


Additionally, TSMC will receive USD 5 billion in loans and may claim an investment tax credit of up to 25% of capital expenditures, in addition to the CHIPS Act grant.


Read: SK Hynix to Invest $4 Billion to Develop Semiconductor Manufacturing Facility in USA


Objectives of the Investment


Strengthening U.S. Economic and National Security

This investment is a significant step in strengthening U.S. economic and national security by providing a reliable domestic supply of the chips that will underpin the future economy. These chips will power the AI boom and other fast-growing industries like consumer electronics, automotive, the Internet of Things, and high-performance computing.

Increasing Capacity for Leading-Edge Technology

As TSMC's foundry partner, the company will help its customers unleash their innovations by increasing capacity for leading-edge technology through TSMC Arizona.


Boosting U.S. Semiconductor Production

The investments would put the U.S. on track to produce roughly 20% of the world’s leading-edge chips by 2030.


Read: Intel to Invest $100 Billion to Develop Semiconductor Fabs Across Four States in USA


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