This is a binding contract and is the first major award to be completed under the $52.7 billion program that was created in 2022 – the Chips and Science Act.
President-elect Donald Trump has criticised this programme and there have been suggestions that he will no longer support it once he comes to office.
TSMC is planning to invest a total of $65 billion in building capacity in the US and with this additional funding said that it would be adding a third Arizona fab by 2030.
The company is on course to produce 2 nanometre technology at its second Arizona fab, which is expected to begin production in 2028 and will be using its most advanced chip manufacturing technology called "A16" in the Arizona facility.
It’s been a real achievement on the part of the US authorities in getting TSMC to commit to using its most sophisticated technology – most had expected that it would be focused on 5 or perhaps 6nm.
The funding awarded to TSMC includes up to $5 billion in low-cost government loans and the cash will be received as the company meets specific project milestones. Around $1 billion should be made available by the end of 2024.
The Chips and Science Act has been significant in looking to boost domestic semiconductor output but during his campaign for the presidency, Trump said that it was too expensive and a waste of funds calling it a ‘bad deal’.
However, it does now look like he’s unlikely to ‘roll-back’ on the act and while Trump may want to modify and change some of the priorities of the bill and its allocation of funds, he’s expected to leave most of it intact – at least for the time being.
