TSMC Will Receive $6.6 Billion to Bolster U.S. Chip Manufacturing

The Biden administration will award up to $6.6 billion in grants to Taiwan Semiconductor Manufacturing Company, the leading maker of the most advanced microchips, in a bid to bring some of the most cutting-edge semiconductor technology to the United States.

The funds, which come from the bipartisan CHIPS and Science Act, will help support the construction of TSMC’s first major U.S. hub, in Phoenix. The company has already committed to building two plants at the site and will use some of the grant money to build a third factory in Phoenix, U.S. officials said on Sunday. TSMC will also increase its total investments in the United States to more than $65 billion, up from $40 billion.

Federal officials view the investment as vital for building up a reliable domestic supply of semiconductors, the small chips that power everything from phones and supercomputers to cars and fighter jets. Although semiconductors were invented in the United States, production has largely shifted overseas in recent decades. Only about 10 percent of the world’s chips are made in the United States.

The award is the second largest by the federal government under a program intended to re-establish the United States as a leader in semiconductor manufacturing. Its unveiling comes a few weeks after President Biden announced that Intel, another major chipmaker, would receive $8.5 billion in grants and up to $11 billion in loans during a tour of battleground states meant to sell his economic agenda.

The CHIPS Act, which lawmakers passed in 2022, gave the Commerce Department $39 billion to distribute as subsidies to incentivize companies to build and expand chip plants across the United States. The program is a major pillar of President Biden’s economic policy agenda, which is centered around strengthening American manufacturing.

TSMC’s award will bring the total announced grants to more than $16 billion. Three other smaller companies, including GlobalFoundries, Microchip Technology and BAE Systems, received the first awards.