TSMC raises Arizona chip investment to $40 billion as Biden visits



  • Taiwan company plans second factory at U.S. site to make advanced semiconductors

Taiwan Semiconductor Manufacturing Co. plans to build a second semiconductor factory in Arizona and increase its investment there to $40 billion, the White House said ahead of a visit by President Biden.

TSMC, the world’s largest contract chip maker, is stepping up its plans for U.S. manufacturing with encouragement from the Biden administration and likely financial support from U.S. taxpayers, reflecting Washington’s concerns about reliance on Asia for critical chip making.

Under a previously disclosed $12 billion investment plan, TSMC is already building its first factory in Arizona.

In advance of Mr. Biden’s visit to the plant on Tuesday, the White House released details of a second factory planned for the site, saying construction would start in the coming year and production would begin in 2026.

The second factory, first reported by The Wall Street Journal, will make chips with 3-nanometer technology, equal to the tiniest and fastest chips available today, and TSMC’s total investment in Arizona will expand to $40 billion, the White House said. It didn’t say how many years the investment would cover.

The guest list for Tuesday’s ceremony, marking the initial installation of equipment at the first factory, includes the chief executives of two major TSMC customers, Tim Cook of Apple Inc. and Jensen Huang of graphics-chip company Nvidia Corp.

TSMC’s bet on making cutting-edge chips in the U.S. comes after Washington agreed to provide semiconductor makers with lucrative incentives under legislation passed this year.

TSMC recently started making 3-nanometer chips in Taiwan. By 2026, those chips would likely be at least two generations behind the leading edge.

A nanometer is one-billionth of a meter. The number of nanometers is a rough guide to how much processing power is packed into the chip’s small space, with a lower number indicating a more advanced chip.

The White House said the first TSMC factory in Arizona, which originally was supposed to produce 5-nanometer chips, would also produce 4-nanometer chips. That factory is expected to start mass production in 2024.

TSMC executives have said they plan to keep the most advanced manufacturing in Taiwan.

In a letter to the Commerce Department last month, TSMC said it was primarily relying on its own capital supplemented by U.S. incentive funds for building the complex in Arizona. It didn’t specify how much money it might get from the government. The company also described challenges at the Arizona site such as unexpected construction snags.

This story has been published from a wire agency feed without modifications to the text

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