The Biden administration has finalized a $6.6 billion CHIPS Act grant for Taiwan Semiconductor Manufacturing Co. (TSMC), just two months before President-elect Donald Trump takes office.
Senior administration officials reported that the grant funds will be disbursed in phases as TSMC achieves project milestones, with at least $1 billion expected to be released by year’s end.
As part of this investment, TSMC will manufacture 3-nanometer, 2-nanometer, and A16 chips at three new factories in Arizona, bringing the company’s total U.S. investment to $65 billion. The first Arizona facility will also produce 4nm and 5nm chips, with high-volume production slated to begin in early 2025. The second and third fabs are set to commence production in 2028 and by the end of the decade, respectively.
Nanometer technology refers to the distance between transistors on a chip, with a smaller number typically indicating a more advanced and powerful chip.
“For the first time, we can say that we will be making these breakthrough chips in the U.S.,” U.S. Commerce Secretary Gina Raimondo stated in a Thursday briefing.
TSMC has also confirmed that yield rates—a key metric of chip production efficiency—are as strong in Arizona as they are in Taiwan. “That is an incredible achievement,” Raimondo remarked, highlighting the challenge and significance of maintaining such standards in the U.S.
In addition to the $6.6 billion grant, TSMC will receive a $5 billion loan and qualify for an investment tax credit of up to 25% of capital expenditures.
The Taiwanese company is the second-largest beneficiary of the CHIPS Act after Intel, which received an $8.5 billion grant. Samsung of South Korea ranks third, securing $6.4 billion in funding.
The Biden administration has announced preliminary specifications for more than $36 billion of the $39 billion CHIPS Act manufacturing fund. TSMC is only the second project to reach final terms, following Polar Semiconductors, a U.S.-based semiconductor manufacturer awarded $123 million.
President-elect Trump has raised concerns about the future of the CHIPS Act, which is aimed at boosting semiconductor manufacturing within the U.S.. He has criticized the deal, calling it “very bad” and proposing tariffs as a tool to attract chip manufacturing back to the U.S.
A senior administration official told Nikkei Asia that final agreements leave “little room” for the incoming administration to alter terms, noting, “It’s a binding contract. As long as TSMC meets the milestones, the government is committed to moving forward.”
White House National Economic Adviser Lael Brainard, who co-chairs the CHIPS Implementation Steering Council, shared that additional grants are expected in the coming months. “Over the next two months, the Department of Commerce will finalize more awards, ensuring that the progress continues through the decade,” Brainard stated in Thursday’s briefing.
