Biden Administration Invests $6.6B to Bolster US Chip Manufacturing

WASHINGTON — The Biden administration is awarding up to $6.6 billion in grants to the Taiwan Semiconductor Manufacturing Company, the largest maker of the most advanced microchips in the world, to help support construction of the company’s first major hub in the United States.

The announcement comes nearly 18 months after Biden toured the first facility the company built on its corporate site in Phoenix, Arizona. The company has since expanded into a second facility and recently announced the construction of a third.

With the creation of the third factory, TSMC has now increased its total investment in Arizona to about $65 billion and created over 25,000 direct construction and manufacturing jobs, along with potentially thousands of indirect jobs.

“TSMC’s renewed commitment to the United States, and its investment in Arizona, represent a broader story for semiconductor manufacturing that’s made in America and with the strong support of America’s leading technology firms to build the products we rely on every day,” President Joe Biden said in a statement provided by the White House.

“These facilities will manufacture the most advanced chips in the world, putting us on track to produce 20% of the world’s leading-edge semiconductors by 2030,” the president said.

“The agreement also dedicates $50 million of CHIPS funding to training and developing the local workforce, so workers don’t have to leave their hometowns to find good-paying jobs in innovative industries,” Biden continued.

The funding provided to TSMC comes from the bipartisan CHIPS and Science Act and will be administered by the U.S. Department of Commerce.

Just last month Biden celebrated an agreement to provide Intel Corporation, the tech giant headquartered in Santa Clara, California, with up to $8.5 billion in direct funding and $11 billion in loans for computer chip plants around the country.

Semiconductors power everything from smartphones to cars to advanced weapons systems. Though American know-how led to their invention, the United States’ market share in manufactured chips has gone from nearly 40% of the world’s capacity to just over 10%.

Worse, U.S. production today includes none of the most advanced chips, a situation that Biden said exposes the United States “to significant economic and national security vulnerabilities.”

“I was determined to turn that around, and thanks to my CHIPS and Science Act — a key part of my investing in America agenda — semiconductor manufacturing and jobs are making a comeback,” he said.

Passed in 2022, the CHIPS Act gave the Commerce Department a total of $39 billion to distribute in the form of grants and other subsidies to incentivize manufacturers to build and expand computer chip plants here.

During a conference call with reporters on Sunday, Commerce Secretary Gina Raimondo said the nation currently faces a serious national security problem because it doesn’t manufacture the most sophisticated microchips.

“Now, because of this announcement, these chips will be made in the United States,” she said.

“It’s huge,” she said, adding that “failure is not an option.”

“Leading-edge chips are the core of our innovation system, especially when it comes to advances in artificial intelligence and our military systems,” Raimondo told reporters on the call. “We can’t just design chips. We have to make them in America.”

In a statement posted on the company’s website, TSMC Chairman Dr. Mark Liu said the CHIPS and Science Act meant everything when it came to the firm’s decision to invest in the United States, and that it is already reaping the rewards of that decision.

“Our U.S. operations allow us to better support our U.S. customers, which include several of the world’s leading technology companies. Our U.S. operations will also expand our capability to trailblaze future advancements in semiconductor technology,” Liu said.

Dr. C.C. Wei, TSMC’s CEO, agreed, saying the company is “honored to support our customers who have been pioneers in mobile, artificial intelligence and high-performance computing, whether in chip design, hardware systems or software, algorithms and large language models.”

“They are the innovators driving demand for the most advanced silicon that TSMC can provide. As their foundry partner, we will help them unleash their innovations by increasing capacity for leading-edge technology through TSMC Arizona. We are thrilled by the progress of our Arizona site to date and are committed to its long-term success,” Wei said.

With Monday’s announcement, the total in grants bestowed through the department comes to more than $16 billion.

Past recipients include BAE Systems, GlobalFoundries and Microchip Technology.

Production at TSMC’s first facility is expected to begin later this year, while production at its second facility won’t begin until 2028.

Dan can be reached at [email protected] and @DanMcCue