Business, Feature, Freight News

TSMC Rakes in CHIPs for Semiconductors

[ April 12, 2024   //   Gary G Burrows ]

The U.S. Department of Commerce and TSMC Arizona Corp. have reached a non-binding agreement to help fund the Phoenix-based aerospace company’s efforts to manufacture the world’s most advanced semiconductors.
The U.S. Department of Commerce and TTSMC Arizona Corp. a subsidiary of Taiwan Semiconductor Manufacturing Co. Ltd., have signed a preliminary memorandum of terms, or PMT, to provide up to US$6.6 billion in direct funding under the CHIPS and Science Act, which would support TSMC and its investment of more than US$65 billion in three greenfield leading-fabrications in Phoenix.
The DoC called the proposed investment a “significant step in strengthening U.S. economic and national security by providing a reliable domestic supply of chips to providing a reliable domestic supply of the chips that will underpin the future economy, powering the AI boom and other fast-growing industries like consumer electronics, automotive, Internet of Things, and high-performance computing.”
It also reflects the largest foreign direct investment in a greenfield project in U.S. history.

Anteing Up

CHIPS for America is part of President Biden’s economic plan to support private sector investment, to boost jobs and revitalize communities left behind.
In addition to the proposed direct funding of up to $6.6 billion, the CHIPS Program Office would make about US$5 billion of proposed loans – which is part of the US$75 billion in loan authority provided by the CHIPS and Science Act – available to TSMC Arizona under the PMT. The company has indicated that it is planning to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25 percent of qualified capital expenditures.
Having already announced two fabs in the U.S., TSMC Arizona has committed to build a third fab before the end of the decade, forming a scaled leading-edge cluster in Arizona.
Semiconductors were first created in the U.S. and power everything from smartphones to cars to satellites and weapons systems. However, U.S. production fell from nearly 40 percent of the world’s capacity to close to 10 percent, and none of the most advanced chips. This, Biden aid, exposes the U.S. “to significant economic and national security vulnerabilities.”
TSMC pioneered the pure-play foundry semiconductor business model in 1987, and now manufactures more than 90 percent of the world’s leading-edge logic chips.
TSMC customers ” have been pioneers in mobile, artificial intelligence and high-performance computing, whether in chip design, hardware systems or software, algorithms, and large language models,” said TSMC CEO Dr. C.C. Wei. ” As their foundry partner, we will help them unleash their innovations by increasing capacity for leading-edge technology through TSMC Arizona.”
In Arizona, TSMC’s three fabs are expected to bring a suite of the most advanced process node technologies to the U.S.: the first fab will produce 4 nanometer, or nm, FinFET process technologies; the recently announced second fab will produce the world’s most advanced 2nm nanosheet process technology, in addition to producing 3nm process technologies. TSMC Arizona’s third fab will produce 2nm or more advanced process technologies depending on customer demand.
TSMC Arizona expects to begin high-volume production in their first U.S. fab in the first half of 2025. At full capacity, TSMC Arizona’s three fabs would manufacture tens of millions of leading-edge chips.
With such investment, the U.S. is on track to produce roughly 20 percent of the world’s leading-edge chips by 2030.
The PMT also proposes US$50 million in dedicated funding to develop the company’s semiconductor and construction workforce. TSMC Arizona recently signed an agreement with the Arizona Building and Construction Trades Council, and plans to utilize registered apprenticeship programs to meet a 15 percent apprenticeship utilization rate on the Phoenix construction site.
TSMC Arizona also established one of the first state-supported Registered Apprenticeship programs for semiconductor technicians, with support from the City of Phoenix. TSMC’s U.S.-based recruiting team also collaborate with U.S. university engineering programs, including Arizona State University, University of Arizona, and Purdue University, and is partnering with Maricopa Community Colleges and career technical education programs on initiatives.
The company said it will provide about 6,000 direct manufacturing jobs and more than 20,000 accumulated unique construction jobs and tens of thousands off indirect jobs.
TSMC said its Arizona fabs will be able to better support its key customers, which include U.S. companies AMD, Apple, Nvidia, and Qualcomm. TSMC Arizona has also committed to support development of advanced packaging capabilities – the next frontier of technology innovation for chip manufacturing – through its U.S. partners to be able to purchase advanced chips that are made entirely on U.S. soil.

Tags: TSMC Arizona Corp, U.S. Department of Commerce