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Taiwan Semiconductor Manufacturing (TSMC) has announced plans to significantly increase its investment in the United States, backed by a substantial $6.6 billion federal grant from the US government. This investment will see TSMC's US commitment increase by more than 60%, exceeding $65 billion, facilitating the production of cutting-edge 2 nanometer chips within US borders.
US Secretary of Commerce Gina Raimondo revealed that TSMC will build an additional chip manufacturing facility in Phoenix, Arizona, by 2030, expanding the company's presence on US soil. Raimondo emphasized the importance of this development, stating that it marks the first time that such advanced semiconductor chips will be produced on a large scale in the United States, supporting demand for artificial intelligence technology.
In addition to the federal grant, TSMC will benefit from $5 billion in loans and a potential investment tax credit of up to 25% of capital expenditures. The initiative aims to strengthen semiconductor manufacturing capabilities in the United States and reduce dependence on foreign suppliers.
Raimondo highlighted the broader impact of TSMC's expansion, noting that 14 suppliers are planning new facilities or expansions in the United States to support TSMC's operations. With 70% of TSMC's customers being US companies, the demand for domestically manufactured chips is evident.
TSMC, the world's largest contract chipmaker serving major technology companies such as Apple, Nvidia, Qualcomm and Amazon, previously committed to a $40 billion investment in Arizona. The decision to increase this investment to $65 billion aligns with the United States' ambitions to produce a significant share of advanced semiconductor chips by 2030.
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The expansion plan includes the development of a 4-nanometer chip plant, expected to begin production in 2025, followed by facilities for 3- and 2-nanometer chips. TSMC's strategic decision reflects the intense competition between industry leaders such as Intel and Samsung to advance semiconductor technology.
Despite challenges such as labor shortages and permit delays, TSMC remains committed to its expansion efforts in the United States. The collaboration has received support from major customers such as Apple, Nvidia and AMD, who recognize the importance of domestic chip production to the US economy and national security.
The US government's investment in TSMC underscores a broader effort to revitalize domestic semiconductor manufacturing and strengthen technological independence. Raimondo hinted at more initiatives on the way, highlighting continued momentum in the semiconductor sector.
Meanwhile, other international players, including South Korean giants Samsung and SK Hynix, are also investing in semiconductor facilities in the United States, backed by early grants from Washington. In Japan, substantial subsidies have been allocated to chipmakers such as TSMC, Samsung and Micron to encourage local production.
The expansion of TSMC's operations in the United States reflects a strategic shift in global semiconductor manufacturing, driven by technological advancement and geopolitical considerations. As the race for advanced chip production intensifies, the US government's support for TSMC marks a crucial step toward leadership in semiconductor innovation and production capabilities.
