The Biden administration has taken a significant step to bolster domestic semiconductor manufacturing, finalizing its agreement with Taiwan Semiconductor Manufacturing Company (TSMC). This historic $6.6 billion grant, part of the CHIPS Act, represents a major investment in U.S. technological infrastructure and economic security.
TSMC to Receive $1 Billion This Year, Eyes Expansion in Arizona
TSMC, the world’s largest contract chipmaker, is the first recipient of the CHIPS Act incentives. The company is set to receive $1 billion before the year’s end as it meets pre-set conditions. This funding contributes to TSMC’s ambitious $65 billion expansion plan, which includes constructing three cutting-edge facilities in Arizona. Additionally, TSMC has secured a $5 billion loan from the U.S. government to further support the project.
The Race to Strengthen Supply Chains Amid Geopolitical Tensions
This development underscores the government’s commitment to mitigating supply chain vulnerabilities exacerbated by global conflicts. TSMC’s pledge to cease producing advanced AI chips for Chinese clients, coupled with its efforts to sever ties with entities like Huawei, highlights its strategic alignment with U.S. interests.
President Biden emphasized the broader implications of the initiative:
“Today’s final agreement with TSMC… will spur $65 billion of private investment and create tens of thousands of jobs by the end of the decade. The first facility is on track to open early next year.”
Other Tech Giants Await Their Turn
While TSMC leads the charge, companies like Intel and Samsung are still awaiting their CHIPS Act grants. Business groups are urging swift finalization of these deals, citing the importance of sustaining bipartisan momentum amid potential administrative transitions.
Read more about this landmark development here.
