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The US government will dole out $11.6 billion in CHIPS Act funds to Taiwan Semiconductor in order to get the world’s largest chipmaker to boost its production of the critical technology in Arizona, the US Commerce Department said Monday.
The Taiwanese company — which produces 90% of the world’s super-advanced semiconductors and supplies tech giant like Apple and Nvidia — agreed to build a third factory in Phoenix as part of a $65 billion investment at the production hub, officials said.
TSMC’s first two factories are under construction and expected to begin chip production in 2025 and 2028.
It is the largest foreign direct investment in a brand-new development project in US history, according to the Commerce Department.
“These are the chips that underpin all artificial intelligence, and they are the chips that are necessary components for the technologies that we need to underpin our economy, but frankly, a 21st century military and national security apparatus,” Commerce Secretary Gina Raimondo said in a statement.
The package is tied to the bipartisan CHIPS Act – a sweeping law aimed at boosting domestic production of advanced computer chips amid fraying tensions with China. The $11.6 billion includes $6.6 billion in federal grants and up to $5 billion in low-cost loans.
The agreement marks a major expansion of TSMC’s plans in Arizona. The company had previously committed to spending $40 billion to build out its production hub in the state.
“The CHIPS and Science Act provides TSMC the opportunity to make this unprecedented investment and to offer our foundry service of the most advanced manufacturing technologies in the United States,” TSMC Chairman Mark Liu said in a statement.
“Our US operations allow us to better support our US customers, which include several of the world’s leading technology companies. Our US operations will also expand our capability to trailblaze future advancements in semiconductor technology.”
Apple CEO Tim Cook lauded the announcement, stating that the company was “proud to play a key part in the expansion of TSMC’s US production, and we’ll continue to invest in America and support a new era of American advanced manufacturing.”
Nvidia boss Jensen Huang said TSMC “has been a long-standing partner of Nvidia since we invented the GPU and accelerated computing, and our ongoing innovation in artificial intelligence would not have been possible without them.”
TMSC is one of a handful of companies set to receive funding through the CHIPS Act.
Samsung is reportedly set to double its investment on computer chip production in Taylor, Texas, to a whopping $44 billion, according to the Wall Street Journal.