The U.S. Commerce Department has today awarded a $6.6 billion grant and up to $5 billion in government loans to Taiwan headquartered  semiconductor producer TSMC.

According to multiple reports, TSMC now has plans to invest upward of $65 billion into the design, construction and operation of three semiconductor fab facilities in Phoenix, Arizona.  Before today’s announcement, TSMC’s prior plans were to invest $40 billion consisting of two facilities, one of which would include 4-nanometer process technology. With the addition of the third facility, the investment is now upped to $65 billion.

It was further confirmed by U.S. Commerce Secretary Gina Raimondo that the global leader in semiconductor chip production will be producing cutting-edge 2-nanometer advanced chip technology in the U.S. with the consummation of the agreement.

This investment comes as part of the U.S. Chips Act passed in 2022. A previous $8.5 billion grant was awarded to chip producer Intel along with a grant to contract chip producer GlobalFoundries.

The Commerce Secretary told reporters that multiple semiconductor producers has requested upwards of $70 billion in U.S. government assistance under the CHIPS Act, with only $28 billion available. Raimondo pointed to “tough conversations” with the producers as she communicated to do more with less government incentives.

To overcome ongoing concerns that there may not be enough skilled engineers, computer scientists and technicians in the U.S. to support such rapid domestic expansion, today’s Commerce Department announcement included a $50 million award for workforce development programs.


Facility Timetables

The designated TSMC site complex will reportedly include up to three fabs. The first had been delayed with skills shortages and construction setbacks, and is now reportedly scheduled for volume production in the first half of 2025.  The second, which reportedly will include 2-nanometer process technology is currently targeted for 2028. The third, according to reports, is to be slated for the end of the decade.

Both Bloomberg and The Wall Street Journal reported that TSMC will receive these incentives and loans dependent upon construction and production milestone completions that will extend for many months. That are reportedly included clawed back provisions is the contract chip producer does not fulfill the outlined requirements.

Today’s announcement comes after last week’s significant earthquake that impacted the island of Taiwan.

Although TSMC reportedly only encountered a brief shutdown of operations, having a domestic U.S. presence provides an added global supply network resiliency factor.


Related Samsung Electronics Report

The Wall Street Journal reported that Samsung Electronics is Doubling its Planned U.S. Chip Production Presence in Texas. (Paid subscription)

Citing informed sources, the report indicates that Samsung now plans to invest upwards of $44 billion in an advanced logic microprocessor fabrication complex just outside of Austin, Texas.

The report indicates that Samsung is in ongoing negotiations with the U.S. Commerce Department for CHIPS Act awards which are expected to be “one of the largest payouts given to a single company.”

This complex reportedly will include chip fabrication along with a facility for advanced packaging and research and development, reportedly aimed at advanced AI graphics processor chips such as those designed by Nvidia.

In July of 2022, Samsung announced significant plans to invest in U.S. based semiconductor production that included upwards of 11 fabrication facilities.   


SK Hynix U.S. Investment 

Regarding Nvidia, South Korea based SK Hynix announced last week plans to invest upwards of $3.9 billion in an advanced memory chip packaging facility to be located in Lafayette, Indiana.

This facility will reportedly produce termed high-bandwidth memory (HBM), an important component utilized in advanced AI computing.  This facility is reportedly being planned to begin production in the second half of 2028.

HBM memory and advanced graphics processor chips together support the faster processing speeds needed to support generative AI capabilities including those of Nvidia.


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