The U.S. Department of Commerce and the Biden Administration announced a “final agreement” with TSMC Arizona, a unit of Taiwan-based TSMC, to grant the company $6.6 billion in CHIPS Act for three chip fab projects in Phoenix, Arizona.
How “final” the agreement really is will be put to the test after the Trump Administration 2.0 begins early next year.
The announcement follows the news from last April of a “non-binding preliminary memorandum of terms” with TSMC Arizona on the award. Taking more than six months to go from a preliminary agreement to a final one is a prime example why many in the semiconductor industry–most recently Intel CEO Pat Gelsinger in early November– have grumbled about how the potentially game-changing legislation is taking too long to change the game. The finalized agreement with TSMC might not be the last finalized CHIPS Act agreement announced in the final days of an outgoing administration.
Whatever happens in the next two months, chips giants like TSMC, Intel, and others that received initially positive news about CHIPS Act grants will, starting Jan. 20, 2025, face the prospect of feeling out a new presidential administration that during the pre-election home stretch sent mixed messages about whether or not it would support the Biden-boosted policy. It will be an interesting dance to watch, and Gelsinger already is looking light on his feet by expressing optimism about working with the Trump Administration, a statement that came post-election and just days after his earlier CHIPS Act complaint.
As for TSMC Arizona, it has long been planning two chip fab projects in the Phoenix area, and announced a third at the time of the preliminary agreement. The first fab is scheduled to begin production next year, with the second facility to follow in 2028, and the third reportedly by 2030.
President Joe Biden said in a Commerce Dept. statement, “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 and create tens of thousands of jobs by the end of the decade. This is the largest foreign direct investment in a greenfield project in the history of the United States. The first of TSMC’s three facilities is on track to fully open early next year, which means that for the first time in decades an America manufacturing plant will be producing the leading-edge chips used in our most advanced technologies – from our smartphones, to autonomous vehicles, to the data centers powering artificial intelligence. Today’s announcement is among the most critical milestones yet in the implementation of the bipartisan CHIPS & Science Act, and demonstrates how we are ensuring that the progress made to date will continue to unfold in the coming years, benefiting communities all across the country.”
TSMC Chairman and CEO Dr. C.C. Wei added, “Entering this phase of the U.S. CHIPS and Science Act marks a pivotal step in strengthening the semiconductor ecosystem in the United States,” said TSMC Chairman and CEO Dr. C.C. Wei. “TSMC appreciates the continual collaboration with customers, partners, local communities and the U.S. government beginning in early 2020. The signing of this agreement helps us to accelerate the development of the most advanced semiconductor manufacturing technology available in the U.S.”