TSMC, US agree on construction of third semiconductor plant in Arizona

By Al Mayadeen English
Source: Agencies
8 Apr 2024 18:24
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The $6.6 billion funding resulted from a Preliminary Memorandum of Terms (PMT) with the US Department of Commerce, intended to contribute to the CHIPS and Science Act.

This photo shows the icon of TSMC (Taiwan Semiconductor Manufacturing Company) during the Taiwan Innotech Expo at the World Trade Center in Taipei, Taiwan, Friday, Oct. 14, 2022 (AP Photo)

The Taiwan Semiconductor Manufacturing Company (TSMC) announced on Monday a $6.6 billion plan to launch the construction of a third semiconductor plant in Arizona in collaboration with the US Department of Commerce.

According to the company, the $6.6 billion funding resulted from a Preliminary Memorandum of Terms (PMT) with the US Department of Commerce, intended to contribute to the CHIPS and Science Act.

It further stated that the decision to build a third semiconductor plant is driven by strong customer demand and aims to meet the growing need for advanced semiconductor products in the US.

"TSMC today announced that the U.S. Department of Commerce and TSMC Arizona have signed a non-binding preliminary memorandum of terms (PMT) for up to US$6.6 billion in direct funding under the CHIPS and Science Act. TSMC also announced plans to build a third fab at TSMC Arizona to meet strong customer demand leveraging the most advanced semiconductor process technology in the United States," the statement read.

The statement also indicated that, in addition to the $6.6 billion in direct financing, the memorandum also provides access to up to $5 billion in loans for TSMC.

In a statement published by the White House earlier today, US President Joe Biden said that with the addition of its first two plants in Arizona, TSMC's overall investment in the capacity to produce cutting-edge semiconductors in the US state will reach $65 billion.

"The agreement also dedicates $50 million of CHIPS funding to training and developing the local workforce, so workers don't have to leave their hometowns to find good-paying jobs in innovative industries," the White House statement read.

According to the company, the three plants are anticipated to generate 6,000 direct high-tech, high-wage jobs, along with more than 20,000 accumulated unique construction jobs, and tens of thousands of indirect supplier and consumer jobs.

The Chips and Science Act passed in August 2022, allocated $280 billion in funding aimed at narrowing the gap between major global semiconductor producers and the lagging domestic production in the US.

In 2020, TSMC announced plans to construct its first semiconductor plant in Arizona, with an investment of $12 billion. Then, in 2022, the company announced the development of a second plant, increasing the investment to $40 billion. The first plant is set to commence production utilizing 4-nanometer technology in the first half of 2025. Meanwhile, the second plant will focus on manufacturing the next-generation advanced 2-nanometer process technology, with production scheduled to commence in 2028.