TSMC today announced that the US Department of Commerce and TSMC Arizona have signed a non-binding preliminary memorandum of terms (PMT) for up to US$6.6 billion in direct funding under the CHIPS and Science Act. TSMC also announced plans to build a third fab at TSMC Arizona to meet strong customer demand leveraging the most advanced semiconductor process technology in the United States.
According to TSMC, as it makes progress in completing its first fab and continues construction of its second fab at its Arizona subsidiary, the third fab brings TSMC's total capital expenditure for the Phoenix, Arizona site to more than US$65 billion, making the site the largest foreign direct investment in Arizona history, and the largest foreign direct investments in a greenfield project in US history.
"The CHIPS and Science Act provides TSMC the opportunity to make this unprecedented investment and to offer our foundry service of the most advanced manufacturing technologies in the United States," said TSMC Chairman Dr. Mark Liu. "Our US operations allow us to better support our US customers, which include several of the world's leading technology companies. Our US operations will also expand our capability to trailblaze future advancements in semiconductor technology." "We are 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," said TSMC CEO Dr. C.C. Wei.
TSMC Arizona's first fab is on track to begin production leveraging 4nm technology in the first half of 2025. The second fab will produce the world's most advanced 2nm process technology with next-generation nanosheet transistors in addition to the previously announced 3nm technology, with production beginning in 2028. The third fab will produce chips using 2nm or more advanced processes, with production beginning by the end of the decade. Each of the three fabs, like all of TSMC's advanced fabs, will have a cleanroom area approximately double the size of an industry-standard logic fab.
In addition to the proposed US$6.6 billion in direct funding, the PMT also proposes to provide TSMC with up to US$5 billion in loans. TSMC plans to apply for U.S. Treasury Department Investment Tax Credits of up to 25% of the qualified capital expenditure at TSMC Arizona. The company remains committed to its long-term financial goals, which are a 15-20% revenue Compound Annual Growth Rate (CAGR) in USD terms, 53% and higher gross margin, and 25% and higher return on equity (ROE).
"Today's announcement highlights the strong commitment from Secretary Raimondo and the entire administration to ensure the US plays a central role in creating a more geographically diverse and resilient semiconductor supply chain," said AMD Chair and CEO Lisa Su. "TSMC has a long track record of providing the leading-edge manufacturing capabilities that have enabled AMD to focus on what we do best, designing high-performance chips that change the world. We are committed to our partnership with TSMC and look forward to building our most advanced chips in the US."
"We congratulate TSMC for its historic investment and applaud the Commerce Department for its support. TSMC has been a long-standing partner of Nvidia since we invented the GPU and accelerated computing, and our ongoing innovation in Artificial Intelligence (AI) would not have been possible without them. We are excited to continue our partnership with TSMC as it brings
cutting-edge facilities to Arizona," said Jensen Huang, founder and CEO of Nvidia.
