President Biden’s message to semiconductor manufacturers. Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) received a $6.6 billion grant from the White House to build three manufacturing plants, also known as fabs, in the Phoenix, Arizona, area. That doesn’t include about $5 billion in government loans.
As part of the deal, TSMC agreed to increase its planned investment in Arizona by $25 billion, to $65 billion. Companies currently building in the state have pledged to build a third by 2030. The White House said it is the largest foreign direct investment in Arizona’s history and is expected to bring 6,000 high-paying technology jobs and 20,000 construction jobs to the state.
One neat thing about these factories is that they will allow TSMC to complete all aspects of the wafer manufacturing process, including advanced packaging, here in the United States. I’m not talking about putting a box and warranty information around the chip. In this case, packaging refers to arranging the various components to build the final product, in addition to adding power, input, and output. As things stand, even components are manufactured in the United States and then mailed again around the world for final sale. These Arizona plants will eventually cease all jet flying.
According to reports, once all three factories are operating well, they will produce tens of millions of chips to power products such as smartphones, self-driving cars, and of course, artificial intelligence data center servers. Thanks to the partnership with Apple, future iPhones and Macs will use 4-nanometer and 3-nanometer chips produced in the Phoenix factory. TSMC already has the first two fabs, but current plans are for the first to be fully operational next year, the second in 2028 and the third in 2030.
The White House said this investment, along with other grants and loans from the Chip Act, will make the United States a global chip manufacturing power. The federal government says that by 2030, the United States will produce 20% of the world’s cutting-edge chips.
President Biden said: “The United States invented these chips, but over time our production capacity dropped from nearly 40% of the world’s production to close to 10%, and we were not producing the most advanced chips, which left us facing a significant crisis. Economic and national security vulnerabilities.”
One of the main goals of the CHIPS Act is to attract global chip manufacturers to produce here in the United States, and it looks like it’s working. Last week, Samsung announced it would invest $44 billion and plan ambitious expansion. GlobalFoundries, a multinational semiconductor company, will help pay for a new manufacturing plant in New York that will manufacture chips for the automotive, aerospace, defense and artificial intelligence industries. Intel recently spent $8.5 billion to continue its various operations in the United States.
