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Apple Supplier TSMC was awarded $11.6 Billion in U.S. Grants and Loans to construct a Third Factory in Arizona focused on 2nm processors


A new report this morning states that the US plans to award Taiwan Semiconductor Manufacturing Co. (TSMC) $6.6 billion in grants and as much as $5 billion in loans to help the world’s top chipmaker build factories in Arizona, expanding President Joe Biden’s effort to boost domestic production of critical technology.

Under the preliminary agreement announced by the US on Monday, TSMC will construct a third factory in Phoenix, adding to two facilities in the state that are expected to begin production in 2025 and 2028.

In total, the package will support more than $65 billion in investments at the three plants by TSMC, the go-to chipmaker for companies such as Apple Inc. and Nvidia Corp.

TSMC’s third fabrication site, or fab, will rely on next-generation 2-nanometer process technology, and is slated to be operational before the end of the decade. US Commerce Secretary Gina Raimondo said the 2nm chips are essential to emerging technologies including artificial intelligence, as well as for the military.

“For the first time ever, we will be making at scale the most advanced semiconductor chips on the planet here in the United States of America, by the way, with American workers,” Raimondo told reporters in a briefing ahead of the announcement. TSMC is planning to first make 2nm chips in Taiwan in 2025.

TSMC’s award marks another milestone in Biden’s push to boost the US semiconductor industry with the 2022 Chips and Science Act. It’s one of the largest announced under the program, which set aside $39 billion in direct grants — plus loans and guarantees worth $75 billion — to persuade semiconductor companies to build factories in America after decades of shifting production abroad.

The TSMC site has seen several setbacks, including months of conflict with labor unions that resulted in delays at the first factory. The second facility, which is now slated to begin manufacturing 2nm and 3nm chips in 2028, was delayed from 2026 due to market conditions and uncertainty about levels of US government support. At least one TSMC supplier has scrapped its planned Arizona project, citing workforce difficulties.

It will be months before TSMC receives any of the promised funding, as the company enters a due-diligence period before reaching a final, binding agreement. Money will then be disbursed based on construction and production benchmarks, and could be clawed back if TSMC doesn’t hold up its end of the deal. For more, read the full Bloomberg report.

In December 2022, Tim Cook spoke at a TSMC Event stating: “Today is only the beginning,” Cook said. “Today we’re combining TSMC’s expertise with the unrivaled ingenuity of American workers. We are investing in a stronger brighter future, we are planting our seed in the Arizona desert. And at Apple, we are proud to help nurture its growth.” Cook later sent out a Tweet as presented below.

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