TSMC Scores $11.6 Billion In U.S. Government Funding For New Chip Making Plants

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

In a major step towards establishing a sustainable semiconductor supply chain in the United States over the course of this decade, the Biden-Harris Administration announced today that it has signed a preliminary memorandum of terms with the Taiwan Semiconductor Manufacturing Company (TSMC) to set up three new chip manufacturing plants in the U.S. TSMC, the world’s largest contract chip manufacturer, had announced to build two facilities in the U.S. capable of manufacturing chips with feature sizes as small as 2-nanometers. Today’s announcement also features a third new chip plant that will be dedicated to making chips with 2-nanometer or advanced technologies.

TSMC Secures U.S. Government Help In Training Labor To Build, Equip Its New Chip Manufacturing Plants In America

The non binding agreement signed by the Commerce Department and TSMC earmarks $6.6 billion in funding for three new chip manufacturing plants in the U.S. TSMC has already made a lot of headway into setting up the first of these sites, with construction underway for years. This plant will produce 4-nanometer chips, which are an advanced variant of the semiconductors initially manufactured under TSMC’s N3 process family.

Today’s release also shares that the first site will enter high volume production in the first half of next year. Before entering mass production, chip manufacturers gradually scale up production to ensure that all machines are tuned correctly and there are no impurities in any part of the production process. High volume production precedes mass production, and this first batch of products typically heads to the fab’s preferred customer if it is a contract manufacturer like TSMC.

Crucially, TSMC will also make 2-nanometer nanosheet chips at its second site, the firm announced today. This will bring its U.S. operations base at par with facilities in Taiwan, and as part of today’s announcement, the fab also confirmed that a third plant for 2-nanometer or smaller chips will be built in the U.S. by the end of the decade if there is customer demand for the products.

TSMC founder Dr. Morris Chang at the firm’s sports day. Image: Ye Xinming/UDN

The high volume production timeline of H1 2025 for the first site marks a delay from TSMC’s initial plans. This delay was confirmed last year, and TSMC attributed it to a lack of manpower to set up the machines at the site. Today’s agreement appears to take these reasons into account as well since the Commerce Department has added $50 million in funding for developing a construction workforce.

TSMC is also working with the Universities of Arizona, Arizona State and Purdue for a registered apprenticeship program that plans to bring more technicians on board for the new chip manufacturing plants.

In addition to the $6.6 billion in direct funding, the agreement between Commerce and TSMC also earmarks $5 billion in proposed loans to set up the plants. TSMC has earmarked tens of billions of dollars in investment to set up the sites, and some of the conditions that it will have to meet to unlock U.S. government funding include ensuring that American chip manufacturing capacity remains superior to any sites that might be set up in China.

Share this story