WASHINGTON (AFP) – Chip giant Taiwan Semiconductor Manufacturing Company (TSMC) has agreed to build a third semiconductor factory in Arizona, raising its total investment in the United States (US) to USD65 billion, US officials said yesterday.
US President Joe Biden’s chief economic adviser Lael Brainard hailed the election-year news as “a new chapter for America’s semiconductor industry”.
She told reporters the investment planned by TSMC is based on a preliminary agreement with the US Commerce Department that is tied to a major investment law called the Chips and Science Act.
Under the agreement, TSMC will receive up to USD6.6 billion in direct funding from the US government and could get up to another USD5 billion in the form of loans. The law is a pillar of the administration’s drive to protect and strengthen American industrial power as Biden runs for another term in November.
The US is seeking to ward off the prospect of suffering shortages of cutting edge chips that are essential for making cell phones, electric cars and advanced military equipment.
As things stand now the US is highly dependent on Asia for these components and thus vulnerable in the event of a geopolitical crisis.
TSMC, which had already planned to build two plants in Arizona, is going to make semiconductors even more advanced than originally planned at one of them and will also construct a third facility, US officials said yesterday.
The company is thus raising its total investment in the US from USD40 billion to USD65 billion.
“For the first time ever, we will be making at scale the most advanced semiconductor chips on the planet here in the US,” Commerce Secretary Gina Raimondo said. “These are the chips that underpin all artificial intelligence.”
Raimondo said that with these plans, TSMC would create at least 6,000 direct high-tech jobs but also more than 20,000 in the construction of the factories and tens of thousands of indirect jobs.
“Our US operations allow us to better support our US customers,” said TSMC chairman Mark Liu.
TSMC accounts for more than half of the world’s semiconductor production and has begun to diversify its production. Besides in the US, the company plans to make chips in Japan and Germany.
The Chips and Science Act passed in 2022 calls for USD52.7 billion in money to overhaul the semiconductor industry in the US, with the idea that making public money available for this purpose will lure private investment.
The US company Intel, for instance, recently announced new production capacity in several states including Arizona, one of the swing states seen as a must win for Biden in November’s election. Biden won Arizona narrowly in 2020 against Donald Trump, his presumptive rival again this year.
