TSMC has entered into a preliminary agreement with the U.S. Department of Commerce, securing up to $6.6 billion in direct funding and access to up to $5 billion in loans under the CHIPS and Science Act. With this latest round of support from the U.S. government, TSMC in turn will be adding a third fab to their Arizona project, with its investment in the region soaring to more than $65 billion. This move not only signifies the largest foreign direct investment in Arizona but also marks one of the biggest support packages that the U.S. government plans to make under the CHIPS Act, second only to Intel's $8.5 billion award last month.

TSMC is currently equipping its Fab 21 phase 1 and expects that it will start making chips using N4 and N5 (4 nm and 5 nm-class) process technologies in the first half of 2025. TSMC's Fab 21 phase 2 will commence operations in 2028, and will make chips on N3 and N2 (3 nm and 2 nm-class) production nodes. The newly-announced third fab (designation TBD) is set to manufacture chips on processes of 2 nm-class or beyond, with the start of production anticipated by the end of the decade.

TSMC has not announced a planned capacity for the new fab, only noting that it will be similar to the other two Arizona fabs, boasting a cleanroom space roughly twice as large as that of a typical "industry-standard logic fab." If it is sized similarly to the other Arizona fabs, then this strongly implies that the new fab will be another MegaFab-class facility – a mid-range fab producing around 25,000 wafer starts per month. TSMC does operate even larger fabs – the 100K WSPM GigaFab – though to date they've yet to build any of these outside of Taiwan.

“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,” said TSMC Chairman Dr. Mark Liu. “Our U.S. operations allow us to better support our U.S. customers, which include several of the world’s leading technology companies. Our U.S. operations will also expand our capability to trailblaze future advancements in semiconductor technology.”

The construction of three fabs in Arizona is poised to generate approximately 6,000 direct high-tech jobs, contributing significantly to the creation of a skilled workforce. This workforce is expected to play a crucial role in fostering a dynamic and competitive global semiconductor ecosystem. Moreover, the project is projected to create over 20,000 construction jobs, in addition to spawning tens of thousands of indirect jobs related to suppliers and consumer services.

AMD, Apple, and NVIDIA fully support TSMC's project and all of them expressed interest in using TSMC's capacities in the U.S.

“Today’s announcement highlights the strong commitment from Secretary Raimondo and the entire administration to ensure the U.S. plays a central role creating a more geographically diverse and resilient semiconductor supply chain,” said AMD Chair and CEO Lisa Su. “TSMC has a long track record of providing the leading-edge manufacturing capabilities that have enabled AMD to focus on what we do best, designing high-performance chips that change the world. We are committed to our partnership with TSMC and look forward to building our most advanced chips in U.S.”

TSMC's ventures in Arizona have encountered obstacles, such as setbacks caused by labor shortages and doubts about the U.S. governmental funding. As a result, production at the second facility has been postponed from 2026 to 2028. Moreover, Bloomberg has reported that at least one supplier for TSMC has called off its intended project in Arizona, attributing the decision to challenges in securing a workforce. The address the workforce issues, the TSMC grant includes a $50 million allocation for training of the local workforce.

Sources: TSMC, Bloomberg

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  • RedGreenBlue - Monday, April 8, 2024 - link

    It also disincentivizes a Chinese invasion because China really wants those advanced fabs and EUV machines. There was a report a long time ago that they basically boxed up a fab and shipped out of Taiwan.
  • Reflex - Wednesday, April 10, 2024 - link

    Japan is not a NATO member. NATO membership is an Atlantic alliance. There is no NATO equivalent on the Pacific sphere although the USA has been encouraging such an alliance to offset China. Japan does have a defense pact with the United States, but an attack on Japan would not result in a NATO response.
  • ct760ster - Friday, April 19, 2024 - link

    Japan is a member of RIMPAC
  • peevee - Thursday, April 25, 2024 - link

    Japan is NOT a NATO member.

    And being sourced from a NATO member is not good enough for supply chain security in case of a war. Would you rely on parts from, say, Estonia (which IS a NATO member) in case of a war with Russia? It could be overrun within hours. Only US-based suppliers are really good enough, and that might even EXCLUDE Guam or Hawaii in case of a war with China for example. Or even Alaska.
  • Blastdoor - Tuesday, April 9, 2024 - link

    The idea is not to give TSMC a free fab. The idea is to lower the cost enough to make it worthwhile for them to make the investment.
  • kfishy - Tuesday, April 9, 2024 - link

    Are there *any* commercial chips being made in the one operational TSMC US fab that we know of?
  • GeoffreyA - Tuesday, April 9, 2024 - link

    "To ensure the U.S. plays a central role creating a more geographically diverse and resilient semiconductor supply chain"

    Geographically diverse, or monopoly and control?
  • sjkpublic@gmail.com - Tuesday, April 9, 2024 - link

    Geographically diverse. See:
    https://www.youtube.com/watch?v=AJGrdtKT3LM
  • GeoffreyA - Wednesday, April 10, 2024 - link

    "Geographically diverse" is good. I just doubt their idea of that term.
  • Reflex - Wednesday, April 10, 2024 - link

    I mean they don't have monopoly and control, there are a lot of advanced players and more coming with Intel broadening it's scope. TSMC is the market leader but the contenders are increasing.

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