TSMC’s facilities will produce logic chips for technologies such as AI applications, high-performance computing, and 5G/6G smartphones. Credit: Marko Aliaksandr/Shutterstock.

The US Department of Commerce has awarded up to $6.6bn in direct funding to TSMC Arizona Corporation (TSMC Arizona), a subsidiary of Taiwan Semiconductor Manufacturing Company Limited (TSMC), to support the production of semiconductors.

Awarded under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities, the grant aims to secure US leadership in advanced semiconductor technology and bolster economic and national security.

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The funding will support TSMC Arizona’s planned investment of more than $65bn in three semiconductor fabrication facilities in Phoenix, Arizona.

The Department will release the funds when TSMC Arizona meets specific project milestones.

These facilities will produce logic chips for technologies such as AI applications, high-performance computing, and 5G/6G smartphones.

TSMC Arizona’s fabs are expected to produce tens of millions of these chips, with early production yields matching those of TSMC’s Taiwan plants.

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The investment in TSMC Arizona is anticipated to create around 6,000 direct manufacturing jobs and more than 20,000 construction jobs.

In addition to the $6.6bn funding, the CHIPS Program Office will also offer up to $5bn in proposed loans to TSMC Arizona.

US President Joe Biden said: “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.”

CHIPS for America has already awarded approximately $6.72bn and allocated over $36bn in proposed funding across 20 states. The initiative also plans to invest billions in research and innovation, potentially creating more than 125,000 jobs.