TSMC Expands Semiconductor Manufacturing in Arizona with Major Investment
In a significant development for the U.S. semiconductor industry, TSMC has announced the construction of a third semiconductor fabrication plant (fab) in Phoenix, Arizona. This expansion brings TSMC’s total investment in the state to over $65 billion and is set to create more than 6,000 jobs, marking it as the largest foreign direct investment in Arizona’s history.
PHOENIX, AZ (April 8, 2024) – TSMC has reached preliminary terms with the U.S. Department of Commerce for up to $6.6 billion in direct funding under the CHIPS and Science Act. The investment will fund the development of a third fab at TSMC Arizona, using advanced semiconductor process technologies.
The completion of TSMC’s first fab is progressing, and February 2024 saw the last steel beam placed on its second fab. This third fab increases TSMC’s commitment to Arizona, solidifying its role in the U.S. semiconductor ecosystem. The three fabs are projected to generate 6,000 high-tech, high-wage jobs, positioning Arizona as a pivotal hub for semiconductor manufacturing.
Governor Katie Hobbs remarked, Arizona is an international leader in the semiconductor industry, a testament to our strong and enduring relationship with TSMC. With this vital investment made possible by the CHIPS Act, this partnership will continue to thrive.
She highlighted the role of the Arizona Commerce Authority in attracting TSMC, reinforcing Arizona’s growing reputation as the “silicon desert.”
TSMC Chairman Dr. Mark Liu commented on the investment, stating, The CHIPS and Science Act provides TSMC the opportunity to make this unprecedented investment and to offer our foundry service of the most advanced manufacturing technologies in the United States.
This move supports TSMC’s U.S. customers, including several leading technology firms.
TSMC’s CEO, Dr. C.C. Wei, emphasized the company’s role in supporting innovation, stating, We are honored to support our customers who have been pioneers in mobile, artificial intelligence, and high-performance computing. As their foundry partner, we will help them unleash their innovations by increasing capacity for leading-edge technology through TSMC Arizona.
Production at TSMC Arizona’s first fab is expected to begin in 2025 using 4nm technology. The second fab will produce 2nm technology with nanosheet transistors starting in 2028. The third fab aims to produce chips with 2nm or more advanced processes by the decade’s end.
Senator Mark Kelly praised the grant and TSMC’s expansion, noting, This grant and TSMC’s commitment to increase their presence in our state are going to create thousands of great-paying jobs and strengthen our national security by bringing critical technology supply chains back from overseas.
Senator Kyrsten Sinema and Phoenix Mayor Kate Gallego also voiced their support for TSMC’s investment, underscoring the economic and strategic benefits for Arizona and the U.S. semiconductor industry.
TSMC is committed to eco-friendly manufacturing with a focus on energy efficiency and water conservation. The Arizona fabs are designed to achieve a 90% water recycling rate, with plans for an industrial water reclamation plant targeting near zero liquid discharge
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In addition to the $6.6 billion in direct funding, TSMC may receive up to $5 billion in loans and plans to apply for U.S. Treasury Department Investment Tax Credits. The company maintains its financial goals, including a 15-20% revenue compound annual growth rate and a 53% or higher gross margin.
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