Biden Secures $6.6B for Major TSMC Factories in Arizona, Safeguarding CHIPS Act Deal from Trump

The Biden administration has confirmed a significant $6.6 billion financial award to Taiwan Semiconductor Manufacturing Company (TSMC), which is in the process of constructing expansive factories in Phoenix. This decision occurs amidst apprehensions about potential policy shifts following the election of Donald Trump.

Secretary of Commerce Gina Raimondo emphasized the enormous impact of this investment, highlighting its importance for both economic growth and national security ahead of the official announcement, which came just days after Trump’s victory.

TSMC plans to allocate $65 billion towards the establishment of three cutting-edge fabrication plants in Arizona, generating thousands of jobs in the state. These semiconductors are crucial for various technologies, from computers to self-driving cars and even kitchen appliances.

U.S. officials pointed to the timing of this decision as a proactive measure in light of Trump’s election. Lael Brainard, director of the National Economic Council, suggested that more awards will be finalized soon to ensure the momentum towards domestic semiconductor manufacturing continues into the future.

This $6.6 billion grant is part of a broader $52.7 billion investment from the CHIPS and Science Act, designed to bolster chip research, manufacturing, and workforce development in the U.S. The act also includes provisions for $5 billion in loans.

As one of the largest semiconductor manufacturers globally, TSMC produces chips for major tech firms such as Apple and NVIDIA. However, Trump’s recent remarks have provoked uncertainty among investors, as he criticized U.S. subsidies for Taiwanese chip production.

Despite previous opposition to the CHIPS Act, Speaker of the House Mike Johnson has faced pressure from fellow Republicans to reconsider, given the potential job losses in their districts.

TSMC first announced plans for an Arizona fabrication plant in May 2020, with operations commencing last April. The subsequent phases of development include additional fabs slated for production by 2028. To access funding under the CHIPS Act, TSMC is required to meet specific construction and production milestones, which they are reportedly on track to achieve.

Michael Schmidt, director of the CHIPS program office, stated that TSMC is expected to receive at least $1 billion by year’s end, contingent upon meeting necessary benchmarks.

Secretary Raimondo expressed her optimism for TSMC’s progress in Arizona, noting the groundbreaking nature of this manufacturing endeavor. She affirmed that, despite skepticism, the project is advancing successfully.

According to the White House, TSMC’s investment marks the largest foreign investment in U.S. history in this sector. President Biden reiterated the importance of returning semiconductor manufacturing to the United States, emphasizing that a fully operational American fab will harness the capabilities to produce advanced chips for the first time in decades.