TSMC to receive $11.6 billion from US under CHIPS Act, will build third Arizona plant

[midian182]

What just happened? TSMC has become the latest beneficiary of the CHIPS Act after the US Commerce Department said it had reached a preliminary agreement with the Taiwanese giant to award it up to $6.6 billion in grants and $5 billion in loans. The money will be used by the company to build a third manufacturing plant in Arizona.

TSMC is already building two factories in Phoenix, Arizona. It said the CHIPS money will go toward creating a third fab at the site, operational by the end of the decade, that will use its next-gen 2nm process technology. TSMC plans to make its first 2nm chips in its home nation of Taiwan in 2025.

US Commerce Secretary Gina Raimondo said, "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 added that the 2nm chips are essential to emerging technologies such as artificial intelligence, as well as the military. The grant includes $50 million in funding to train local workers, while TSMC will create 6,000 high-tech manufacturing jobs, more than 20,000 construction jobs, and tens of thousands of indirect jobs, Raimondo added.

TSMC said that it will increase its investment in the United States, from $40 billion to more than $65 billion, thanks to the award. Its other Phoenix fabs are expected to begin production in 2025 and 2028, with a combined capacity of 50,000 wafers per month.

The announcement marks another large handout to come from the CHIPS Act. The White House said in March that Intel would be provided up to $8.5 billion in direct funding along with up to $11 billion in low-interest loans and a 25% investment tax credit on up to $100 billion of capital investments. Samsung, meanwhile, is expected to receive a grant of over $6 billion.

The CHIPS Act has set aside $39 billion in grants along with $75 billion in loans and guarantees to bring semiconductor production back to the US instead of the world being reliant of Asia, especially Taiwan, which China has long claimed to be one of its territories. An estimated $18.7 billion in grant funds remains available after TSMC receives its money.

TSMC's current Arizona projects have been far from smooth. Construction timelines have been delayed on several occasions. There were also reports of hiring difficulties due to the twelve-hour days, common weekend shifts, and a "brutal" work-life balance.

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TSMC to receive $11.6 billion from US under CHIPS Act, will build third Arizona plant

 

[gamerk2]

Hey look, helping to subsidize costs is an effective way of moving jobs back to the US. Who'd have thought?

 

[Uncle Al]

Watch this one closely .... with China rattling it's sword, this could be the first step in them moving their ENTIRE operation to the USA. Overall product costs will go up, but so will availability without fear of China taking them over and hiding everything .....

 

[Axeia]

Watch this one closely .... with China rattling it's sword, this could be the first step in them moving their ENTIRE operation to the USA. Overall product costs will go up, but so will availability without fear of China taking them over and hiding everything .....

Part of Taiwan's security guarantee is exactly being important enough on the world stage to have the US at least giving the pretence that they'd come to Taiwan's help. That is mostly due to their importance in semi conductor manufacturing - no way that Taiwan would risk losing that.

 

[toooooot]

Hey look, helping to subsidize costs is an effective way of moving jobs back to the US. Who'd have thought?

It makes sense for highly advanced production at least. I mean having this stuff exclusively in or even near China was bordering crazy long ago when it was already obvious China is not changing.
It would be nice if businesses that do not gain too much by staying there all came back. But this is not happening.

 

[Endymio]

Hey look, helping to subsidize costs is an effective way of moving jobs back to the US. Who'd have thought?

Subsidization is *not* an effective means of job creation. You forget that this $11.6B didn't come from thin air -- it was taken from other companies and consumers, and thus depresses spending elsewhere.

That said, the CHIPs Act makes sense from a perspective of national security, even if not from a macroeconomic one.

 

[Underdog]

Watch this one closely .... with China rattling it's sword, this could be the first step in them moving their ENTIRE operation to the USA. Overall product costs will go up, but so will availability without fear of China taking them over and hiding everything .....

And with China rattling its sword.................I would like to see the new Arizona production plant being built underground. One lucky missile could spoil your day.

 

[gamerk2]

Subsidization is *not* an effective means of job creation. You forget that this $11.6B didn't come from thin air -- it was taken from other companies and consumers, and thus depresses spending elsewhere.

Once. At which point the economic growth and extra taxation pays for itself, several hundred times over.

You need to invest to turn a profit. This is an investment, and necessary to compete with the investments the rest of the world is making.

 

[Endymio]

Once. At which point the economic growth and extra taxation [from the subsidy] pays for itself, several hundred times over.

The past history of such subsidization efforts demonstrates the opposite, many thousands of times over. In the 19th Century, the US subsidized steamboat and railroad companies -- all those firms failed the moment the subsidies stopped, while their non-subsidized competitors succeeded. Fast-forward to today, where subsidized solar energy firms like Solyandra have cumulatively taken hundreds of billions from government coffers, only to collapse almost as soon as the ink was dry on the subsidy checks.

 

[Starscream07]

Hey look, helping to subsidize costs is an effective way of moving jobs back to the US. Who'd have thought?

If only we got the people to move with as TSMC requested. The US work culture is not conducive to efficiency. Turnover rate here is high compared to Asian countries where a lot of people stick to the same company for many many years and even decades quite often which is so not the case here. We will just pay a premium obviously for all of this.

Not to mention, the talent pool needed here for engineering in fields such as Materials and Chemical is woeful.