The Biden administration is making a bold move to bolster the United States’ semiconductor industry by awarding up to $6.6 billion in grants to Taiwan Semiconductor Manufacturing Company (TSMC), the leading maker of the most advanced microchips. This investment is part of the bipartisan CHIPS and Science Act and aims to bring cutting-edge semiconductor technology to American soil.
TSMC will use the funds to support the construction of its first major U.S. hub in Phoenix, where the company has committed to building two plants and will now add a third factory. This expansion will increase TSMC’s total investments in the United States to over $65 billion, a significant boost from the previous $40 billion commitment.
The Biden administration sees this investment as crucial for establishing a reliable domestic supply of semiconductors, which are essential components in a wide range of products, from smartphones to fighter jets. Currently, only about 10 percent of the world’s chips are made in the United States, making it imperative to bring advanced chip manufacturing capabilities back to the country.
This grant to TSMC is the second largest awarded by the federal government under a program aimed at revitalizing the U.S. semiconductor industry. It follows a recent announcement that Intel, another major chipmaker, would receive substantial financial support to expand its operations.
The CHIPS Act, passed in 2022, allocated $39 billion to the Commerce Department to incentivize companies to build and expand chip plants across the United States. This initiative is a key component of President Biden’s economic policy agenda, which focuses on strengthening American manufacturing.
TSMC’s investment is expected to create thousands of direct manufacturing jobs and tens of thousands of construction jobs. The company will need to meet specific milestones in construction and production to receive the grant payments.
The move to bring TSMC’s advanced chip manufacturing capabilities to the United States is seen as a significant step towards reducing the country’s reliance on overseas production and enhancing national security. With the global supply chain for semiconductors facing challenges, having domestic manufacturing capabilities is crucial for ensuring a stable supply of these critical components.
Overall, the grant to TSMC represents a major investment in the future of the U.S. semiconductor industry and underscores the government’s commitment to revitalizing American manufacturing.
