TSMC Secures $11.6 Billion in US Funding for Advanced Chip Manufacturing

US finalizes up to $6.6 bn funding for chip giant TSMC

The United States will award Taiwanese chip giant TSMC up to $6.6 billion in direct funding to help build several plants on US soil, officials said Friday, finalizing the deal before Donald Trump's administration enters the White House. "Today's final agreement with TSMC -- the world's leading manufacturer of advanced semiconductors -- will spur $65 billion dollars of private investment to build three state-of-the-art facilities in Arizona," said President Joe Biden in a statement. The Biden administration's announcement comes around two months before President-elect Trump takes office. Trump has recently criticized the CHIPS Act, a major law passed during Biden's tenure aimed at strengthening the US semiconductor industry and reducing the country's reliance on Asian suppliers, including Taiwan. While the US government has unveiled over $36 billion in grants through this act, including the award to TSMC, much of the funds remain in the due diligence phase and have not been disbursed. But once a deal is finalized, funds can start flowing to companies that have hit certain milestones. TSMC is the second company after Polar Semiconductor to finalize its agreement. "Currently, the United States does not make on our shores any leading-edge chips, and this is the first time ever that we'll be able to say we will be making these leading-edge chips in the United States," said Commerce Secretary Gina Raimondo told reporters Thursday. "I want to remind everyone that these are the chips that run AI and quantum computing. These are the chips that are in sophisticated military equipment," Raimondo added. Making these chips in the United States, she noted, helps address a national security liability. The first of TSMC's three facilities is set to fully open by early-2025, Biden noted. At full capacity, the three facilities in Arizona are expected to "manufacture tens of millions of leading-edge logic chips that will power products like 5G/6G smartphones, autonomous vehicles, and high-performance computing and AI applications," the Commerce Department said. It added that "early production yields at the first TSMC plant in Arizona are on par with similar factories in Taiwan." The investment is anticipated to create around 6,000 direct manufacturing jobs. A senior US official told reporters on condition of anonymity that they expect at least $1 billion to go to TSMC this year. Besides the $6.6 billion in direct funding, the United States is also providing up to $5 billion in proposed loans to TSMC Arizona. While the United States used to make nearly 40 percent of the world's chips, the proportion is now closer to 10 percent -- and none are the most advanced chips. TSMC shares closed 1.3 percent lower in New York on Friday.

US finalises up to $6.6 billion funding for chip giant TSMC

The United States will award Taiwanese chip giant TSMC up to $6.6 billion in direct funding to help build several plants on US soil, officials said Friday, finalising the deal before a new administration enters the White House. Besides the $6.6 billion in direct funding, the United States is also providing up to $5 billion in proposed loans to TSMC Arizona under the award.The United States will award Taiwanese chip giant TSMC up to $6.6 billion in direct funding to help build several plants on US soil, officials said Friday, finalizing the deal before a new administration enters the White House. "Today's final agreement with TSMC -- the world's leading manufacturer of advanced semiconductors -- will spur $65 billion dollars of private investment to build three state-of-the-art facilities in Arizona," said President Joe Biden in a statement. The Biden administration's announcement comes shortly before President-elect Donald Trump takes office. Trump has recently criticized the CHIPS Act, a major law passed during Biden's tenure aimed at strengthening the US semiconductor industry. While the US government has unveiled over $36 billion in grants through this act, including the award to TSMC, much of the funds remain in the due diligence phase and have not been disbursed. But once a deal is finalised, funds can start flowing to companies that have hit certain milestones. "Currently, the United States does not make on our shores any leading-edge chips, and this is the first time ever that we'll be able to say we will be making these leading-edge chips in the United States," said Commerce Secretary Gina Raimondo in making the latest announcement involving TSMC. "I want to remind everyone that these are the chips that run AI and quantum computing. These are the chips that are in sophisticated military equipment," Raimondo added. Making these chips in the United States, she noted, helps address a national security liability. The first of TSMC's three facilities is set to fully open by early-2025, Biden noted. At full capacity, the three facilities in Arizona are expected to "manufacture tens of millions of leading-edge logic chips that will power products like 5G/6G smartphones, autonomous vehicles, and high-performance computing and AI applications," said the Commerce Department. It added that "early production yields at the first TSMC plant in Arizona are on par with similar factories in Taiwan." The investment is anticipated to create around 6,000 direct manufacturing jobs. Up till now, TSMC has made the vast majority of its leading-edge chips in Taiwan. A senior US official told reporters on condition of anonymity that they expect at least $1 billion to go to TSMC this year. Besides the $6.6 billion in direct funding, the United States is also providing up to $5 billion in proposed loans to TSMC Arizona under the award. While the United States used to make nearly 40 percent of the world's chips, the proportion is now closer to 10 percent -- and none are the most advanced chips.

TSMC secures $11.6bn in funding as Chips Act faces uncertain future

Taiwan Semiconductor Manufacturing Company and Joe Biden's administration have finalised more than $11bn in grants and loans to support the company's US chipmaking plans, as the White House pushes to distribute subsidies before Donald Trump takes office. The deal with the world's biggest chipmaker, which includes up to $6.6bn in grants and up to $5bn in loans, is the first major award under the Chips Act to be finalised. It is also the largest foreign investment in a new manufacturing project in US history, according to the Department of Commerce. TSMC supplies most of the world's leading-edge chips, including Nvidia's artificial intelligence GPUs. But the location of its fabs in Taiwan has led to anxieties about potential US-China tensions affecting supply. "All AI runs on these chips," said US commerce secretary Gina Raimondo, emphasising the TSMC investment would help the US to "outcompete and out-innovate the rest of the world". The Chips Act, passed in 2022 with bipartisan support, is aimed at boosting chip manufacturing in the US and offers financial support to national and foreign companies. But its future is uncertain after the election victory for Trump, who has vowed to undo or re-examine many of his predecessor's signature policies. Trump criticised US chip subsidies during his appearance on Joe Rogan's podcast in October. "That chip deal is so bad," Trump said. "We've put up billions of dollars for rich companies to come and then borrow the money and build chip companies here, and they are not going to give us the good companies anyway." Raimondo will be replaced when Trump takes office and potential nominees for the role reportedly include former pro wrestling executive and co-chair of his transition team Linda McMahon. Industry insiders who spoke to the Financial Times on condition of anonymity acknowledged the uncertainty created by Trump's election, but emphasised the high degree of bipartisan support for building up US chip manufacturing -- which could fit with Trump's "America First" agenda. The funds for TSMC will support the company's planned investment of more than $65bn in three chip factories, or "fabs", in Phoenix, Arizona, which are under construction, and will be awarded based on the completion of "project milestones", the commerce department said. The fabs will be used to make the most advanced 3 nanometre chips, which are used to power AI. "It's impossible to overestimate how significant this announcement is for American national security and economic security," Raimondo said, adding that the "yield" rate -- a key indicator of efficiency -- for one of the TSMC plants in Arizona has proven equal to its counterparts in Taiwan. The plant is expected to start full production next year. After announcing preliminary agreements with about two dozen companies across the chip supply chain under the Chips Act, the commerce department has been locked in complex negotiations over the terms under which the federal grants will ultimately be allocated. The largest of these include an $8.5bn grant for Intel, a $6.4bn grant for Samsung, and a $6.1bn grant for memory chipmaker Micron Technology. A final $1.5bn subsidy award to New York's GlobalFoundries is expected to follow soon, said people familiar with the discussions.

Just Before Biden's Term Ends, Taiwan Semiconductor Lands $6.6 Billion in US Funding to Build Advanced Chip Plants - Taiwan Semiconductor (NYSE:TSM)

TSMC's new facilities in Arizona will power next-gen tech, including 5G/6G and AI applications, starting early 2025. The United States has agreed to provide up to $6.6 billion in direct funding to Taiwan Semiconductor Manufacturing Co TSM to build advanced chip facilities in the U.S. The deal aims to enhance domestic semiconductor production and bolster national security by reducing reliance on foreign suppliers, Barron's reports. The Biden administration announced that Taiwan Semiconductor's investment will attract $65 billion in private capital to establish three state-of-the-art plants in Arizona. Also Read: ASML Projects Revenue Surge to $63 Billion by 2030, Eyes AI and Chip Market Boom The announcement comes just before President-elect Donald Trump assumes office. Trump had previously attacked Taiwan for allegedly undermining the U.S. chip industry and criticized the U.S. Chips Act. The first of Taiwan Semiconductor's facilities will likely commence operations by early 2025, focusing on producing cutting-edge logic chips. These chips will power next-generation technologies, including 5G/6G smartphones, autonomous vehicles, and AI applications. Early production at the Arizona plant reportedly matches the quality of Taiwan Semiconductor's facilities in Taiwan, showcasing strong initial yields. Commerce Secretary Gina Raimondo told Barron's the importance of manufacturing these advanced chips domestically, emphasizing their role in AI, quantum computing, and military hardware. The initiative aims to mitigate risks associated with overseas supply chains by producing these chips on U.S. soil, addressing a critical national security concern. In addition to the direct funding, the U.S. government is extending up to $5 billion in proposed loans to support Taiwan Semiconductor's Arizona project. The investment will likely generate approximately 6,000 direct manufacturing jobs. A senior U.S. official told Barron's that at least $1 billion of the allocated funding could be distributed to Taiwan Semiconductor this year, contingent on meeting specific milestones. Meanwhile, Taiwan Semiconductor remains focused on consolidating its moat while diversifying its footprint beyond Taiwan as global governments dole out attractive subsidies. The contract chipmaker has ramped up its deployment of extreme ultraviolet (EUV) lithography systems, a vital technology in semiconductor production, even with the substantial expense involved. Each EUV machine costs more than $100 million, making them some of the most costly assets in the chip manufacturing sector. Industry analysts suggest that TSMC has significantly boosted its EUV capacity, increasing its share of global EUV installations from 50% in 2020 to 56% by 2023. In Asia, Japan has also earmarked over $64.9 billion to boost the semiconductor and AI sectors. Taiwan Semiconductor is eyeing a second facility in Japan's Kumamoto region, considering a $13.5 billion investment after its first $8.6 billion wafer factory there. Additionally, the company intends to establish a third advanced chip plant valued at $20 billion in Kumamoto to produce 3-nanometer chips. Taiwan Semiconductor stock is up 86% year-to-date. Price Actions: TSM stock is down 1.21% at $186.23 at the last check on Friday. Also Read: Salesforce CEO Marc Benioff Bets Big on Billion Bots Image via Shutterstock This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs