Taiwan Semiconductor Manufacturing Company (TSMC) and the administration of Joe Biden have finalized a funding agreement worth more than 11 billion US dollars. The agreement, which includes up to 6.6 billion US dollars in grants and 5 billion US dollars in loans, is intended to support the construction of three semiconductor factories ("fabs") in Phoenix, Arizona. This is the largest foreign investment in a new manufacturing project in the USA to date.
TSMC, the world's leading manufacturer of advanced chips, supplies Nvidia with graphics processors for artificial intelligence, among others. However, the geostrategic location of its production facilities in Taiwan has raised concerns in the USA about potential tensions with China. The new investment is seen as a crucial step to reduce reliance on foreign semiconductor deliveries.
These chips drive all AI applications," said US Commerce Secretary Gina Raimondo. The investment is an important contribution to securing the technological leadership of the USA.
The funding is part of the Chips Act, passed in 2022 with bipartisan support. The aim of the law is to expand semiconductor production in the USA and support national as well as foreign companies. However, Donald Trump's electoral victory has created uncertainty about the future of the program. Trump has criticized the law and announced plans to reconsider his predecessor's policy.
The chip law is a bad deal," said Trump in a podcast appearance. "We are spending billions on wealthy companies building factories here without providing us with the best technologies.
The funding for TSMC will be tied to the progress of construction projects. The factories are set to produce the most advanced 3-nanometer chips, which are crucial for applications in the field of artificial intelligence. One of the facilities has already reached a production level comparable to Taiwanese standards. Production is planned to start next year.
In addition to TSMC, the US Department of Commerce plans subsidies for other companies: Intel is to receive 8.5 billion US dollars, Samsung 6.4 billion, and Micron Technology 6.1 billion. GlobalFoundries is also close to finalizing a subsidy package of 1.5 billion US dollars.
This decision is a milestone for national security and the economic future of the USA," emphasized Raimondo.
The funding underscores the geopolitical competition for technological supremacy and the U.S. effort to become more independent from global supply chains.
