President Biden’s administration announced a $6.6 billion infusion into expanding a massive semiconductor manufacturing facility in Arizona, a federal investment that administration officials argue will put a U.S.-based facility at the forefront of modern technological manufacturing.
The funds will be provided to Taiwan Semiconductor Manufacturing Co. (TSMC), which is in the process of building two facilities and will now construct a third and increase its investment in the Phoenix area to $65 billion, according to federal officials.
The federal funds are coming from the Chips and Science Act, bipartisan legislation passed in 2022 amid concerns that the United States is ceding too much semiconductor manufacturing to Asia. The lack of domestic production also became an supply chain issue during the covid pandemic, due to the use of computer chips in products including smartphones, laptops, cars and fighter jets.
“TSMC is expanding its manufacturing capabilities in Arizona, such that for the first time ever, you will be making at scale, the most advanced semiconductor chips on the planet here in the United States of America,” Commerce Secretary Gina Raimondo said on a call with reporters ahead of the announcement.
“These are the chips that underpin all artificial intelligence,” she added. “And they are the chips that are necessary components for the technology needed to underpin our economy and, frankly, a 21st-century military and national security apparatus.”
TSMC previously pledged a $40 billion investment for two plants in Phoenix. The latest announcement means the company will expand the second facility, as well as build a third.
Administration officials say the expansion will be vital for national security and put the country in position to compete in a fast-growing industry. For Biden, the new spending is also centered in Arizona, a crucial swing state in the 2024 presidential contest.
The Commerce Department has already announced two grants to individual companies under the Chips Act, with Arizona-based Microchip Technology receiving $162 million and the U.S. subsidiary of European defense contractor BAE Systems receiving $35 million. Biden last month also announced awards of up to $8.5 billion in grants and $11 billion in loans to tech giant Intel to support computer-chip production in several states.
“We’re on a roll,” Raimondo said on the call. “We have more to come.”
The administration estimates that the TSMC investments will bring 20,000 direct construction jobs as the plants are built, as well as 6,000 high-tech jobs when they are completed. The funding includes $50 million that will go toward training and developing a local workforce that can work at the high-tech plants.
“TSMCs commitment to manufacture leading edge chips in Arizona marks a new chapter for America’s semiconductor industry,” said Lael Brainard, White House national economic adviser and co-chair of the CHIPS Implementation Steering Council. “Arizona is becoming a global center for semiconductor leadership.”