TSMC Wins $6.6B From Biden’s CHIPS Act Ahead of Office Reshuffle

President Biden just awarded TSMC $6.6 billion in CHIPS Act funding in a last-minute move before leaving office.

In what could translate into a major boost for US chipmaking, President Joe Biden has announced that TSMC will receive $6.6 billion in direct funding under the CHIPS and Science Act to build not one, but three new cutting-edge chip factories in Arizona.

This funding comes after an initial smaller grant back in April, following which the Commerce Department spent months ensuring TSMC checked all the boxes for the full CHIPS Act requirements. The money will support factories producing chips from the advanced 5nm process node down to the tiny 1.6nm “A16” node that hasn’t even entered production yet.

The CHIPS Act was signed into law by President Joe Biden in August 2022. The White House is pretty open that the Act is all about trying to restore critical semiconductor manufacturing capacity to American soil after years of it migrating overseas. Having to rely so heavily on Asian suppliers for advanced chips is considered a national security risk. The funding aims to plug that gap.

As for TSMC’s specific plans, the company’s US subsidiary will kick things off by producing the first chips at the Arizona site sometime around the middle of 2025. This inaugural fab will be producing semiconductors built on TSMC’s 5nm and 4nm process nodes – the kind of advanced tech commonly used to manufacture high-end GPUs and other high-performance silicon.

Beyond these, it’s worth mentioning that the initial plan was for TSMC’s bleeding-edge 2nm “nanosheet” transistor technology to be produced at a second Arizona factory. But the latest update shuffles that next-gen 2nm production, including chips that will use the A16 nodes, to a third facility instead. We likely won’t see output from that third fab until toward the end of the decade.

In total, TSMC is dropping an astronomical $65 billion to build out this massive new US semiconductor manufacturing hub. While the $6.6 billion in direct funding helps, the Biden administration is also providing $5 billion in loans to support the investment.

We’re seeing companies like Intel also plowing billions into new domestic fabs for future process nodes, though the progress has been slow with Team Blue. Like TSMC, the company is also set to receive an $8.5 billion relief package from the US government. While the funding was originally expected to arrive before the elections in November, Intel’s ongoing financial woes have seemingly caused delays.

TSMC, on the other hand, is going all-in on returning some of its cutting-edge output to America after decades of it being concentrated in Taiwan.