The U.S. government under the Biden administration has pledged to provide up to $6.6 billion so that Taiwan Semiconductor Manufacturing Company (TSMC) will expand its two facilities it is already building in Arizona to ensure that the most advanced chips are being made in the U.S. The company also plans to make a third facility in the area in the future.
The funding is tied to a sweeping 2022 law known as the CHIPS and Science Act, which is aimed at investing $280 billion in U.S. semiconductor manufacturing and research and development.
The funding is part of the United States" move to reduce semiconductor manufacturing dependency from Asian countries and strengthen its chip manufacturing ability, while also bolstering national security.
By supporting the growth of semiconductor production within the country, the Biden administration seeks to address supply chain disruptions experienced during the pandemic and ensure a stable supply of essential microchips for various industries, including technology and defense.
TSMC, which used to primarily manufacture chips in its Taiwanese facilities, is investing in fabrications outside Taiwan, in the U.S. and Japan as demand for more advanced chips soars. TSMC"s expansion in Arizona is expected to create thousands of jobs and contribute to the development of advanced chip manufacturing capabilities in the U.S.
The move also aligns with the government"s goal of increasing domestic chip production to 20% of the global supply. The funding will not only support fabrication construction but is also expected to facilitate workforce development and provide manufacturing tax credits to further incentivize chip production in the country. Around $50 million will be allotted for workforce development and up to $5 billion in government loans.
The U.S. is not the only country pushing heavily for domestic semiconductor manufacturing. Other than Taiwan and the U.S., South Korea, Japan, and India are all investing significantly in semiconductor fabrications or related equipment to position themselves as the upcoming leaders in the chip-making market.
Via Yahoo Finance, ABC News