Arizona fab construction to begin for TSMC after securing $6.6B in CHIPS funding for third facility in Arizona

• TSMC secures $6.6 billion in CHIPS Act funding for construction of third Arizona fab
• Funding addresses delays at existing Arizona fabs
• President Biden aims to boost US semiconductor manufacturing with TSMC investment
• TSMC’s Arizona fabs to produce advanced chips for various industries by 2030
• TSMC to create thousands of jobs in Arizona, with focus on local worker training and development

Arizona Fab Construction: TSMC Secures $6.6B Funding for Third Fab

In a significant development for the semiconductor industry, Taiwan Semiconductor Manufacturing Company (TSMC) has secured $6.6 billion in CHIPS Act funding from the US Department of Commerce. This funding comes after delays at Arizona’s existing fabs and aims to bolster TSMC’s presence in the United States, particularly in Arizona.

Arizona’s Semiconductor Industry Landscape

Arizona’s semiconductor industry is set to undergo a major transformation with the construction of TSMC’s third fab. The $6.6 billion in funding, which includes low-cost government loans, will see TSMC increase its investment in Arizona fabrication plants to a staggering $65 billion. This marks the largest foreign direct investment in a new project in US history.

President Joe Biden has emphasized the significance of this investment, stating that the new facilities will manufacture the most advanced chips in the world. The goal is to position the US as a key player in producing leading-edge semiconductors, with a target of producing 20 percent of such chips globally by 2030.

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Implications of TSMC’s Expansion

By 2025, TSMC’s first Arizona fab is expected to commence high-volume chip production. However, the production of the world’s most advanced 2nm nanosheet process technology will not begin until the second fab becomes operational in 2028. This technological advancement is crucial for driving innovation in sectors such as artificial intelligence, consumer electronics, automotive, Internet of Things, and high-performance computing.

The Commerce Department has highlighted that TSMC’s third fab will cater to the production of 2nm or more advanced process technologies based on customer demand from key companies like AMD, Apple, Nvidia, and Qualcomm. The expansion of TSMC’s operations in Arizona is seen as a strategic move to strengthen the US semiconductor industry and reduce dependency on overseas manufacturing.

Challenges and Opportunities for Arizona’s Workforce

While the funding and expansion of TSMC’s Arizona fabs bring promising prospects for the semiconductor industry, challenges remain. Delays in production timelines have been attributed to a lack of specialized workers, prompting TSMC to push back the timeline for producing advanced chips in the US. The addition of a third fab is expected to create thousands of direct and indirect jobs, necessitating a skilled workforce.

The Arizona Building and Construction Trades Council has raised concerns about the shortage of local workers and has urged TSMC to invest in training programs and hire Arizona residents. To address this, TSMC has committed $50 million to develop the semiconductor and construction workforce, in addition to partnering with the City of Phoenix and universities to train more workers.

The collaboration between TSMC and local educational institutions aims to equip workers with the necessary skills to excel in the semiconductor industry. TSMC’s initiatives include apprenticeship programs, discounts, reimbursements, and priority enrollment for early education and childcare centers. This investment in workforce development is crucial for ensuring that local communities benefit from the economic opportunities generated by TSMC’s expansion.

TSMC’s $6.6 billion funding for the construction of its third fab in Arizona marks a significant milestone in the US semiconductor industry. The expansion of TSMC’s operations is poised to enhance the country’s capabilities in semiconductor manufacturing and drive innovation in key technological sectors. By addressing workforce challenges and investing in training programs, TSMC is not only strengthening its own operations but also contributing to the growth and development of Arizona’s semiconductor industry.