TSMC Raises Arizona Chip Investment to $40 Billion as Biden Visits
Taiwan company plans second factory at U.S. site to make advanced semiconductors
PHOENIX—President Biden visited a Taiwan Semiconductor Manufacturing Co. site Tuesday in Arizona, where the company plans to build a second factory and increase its investment to $40 billion.
TSMC, TSM -2.52% the world’s largest contract chip maker, is stepping up its plans for U.S. manufacturing. That investment follows the passage of a law earlier this year designed to boost U.S. semiconductor production, reflecting Washington’s concerns about reliance on Asia for critical chip making.
“This is going to be an incredible asset to the state of Arizona,” Mr. Biden said during remarks following a tour of the site. “American manufacturing is back.”
Under a previously disclosed $12 billion investment plan, TSMC is already building its first factory in Arizona.
In advance of Mr. Biden’s visit to the plant on Tuesday, the White House released details of a second factory planned for the site, saying construction would start in the coming year and production would begin in 2026.
The second factory, first reported by The Wall Street Journal, will make chips with 3-nanometer technology, equal to the tiniest and fastest chips available today, and TSMC’s total investment in Arizona will expand to $40 billion, the White House said. It didn’t say how many years the investment would cover.
The White House said Mr. Biden met with a group of top executives following his Arizona remarks, including Morris Chang and Mark Liu of TSMC, Tim Cook of Apple Inc., Jensen Huang of Nvidia Corp. , Sanjay Mehrotra of Micron Technology Inc., Lisa Su of Advanced Micro Devices Inc. and Peter Wennink of ASML Holding NV. Mr. Cook tweeted that Apple would be the Arizona site’s largest customer.
Washington agreed to provide semiconductor makers with lucrative incentives under legislation passed this year.
In August, Congress passed the Chips and Science Act of 2022, which included $52.7 billion for U.S. semiconductor companies for research and development, manufacturing and workforce development. The bill also includes provisions to reinforce the supply chain for U.S. companies and spur technological innovation.
TSMC recently started making 3-nanometer chips in Taiwan. By 2026, those chips would likely be at least two generations behind the leading edge.
A nanometer is one-billionth of a meter. The number of nanometers is a rough guide to how much processing power is packed into the chip’s small space, with a lower number indicating a more advanced chip.
The White House said the first TSMC factory in Arizona, which originally was supposed to produce 5-nanometer chips, would also produce 4-nanometer chips. That factory is expected to start mass production in 2024.
TSMC executives have said they plan to keep the most advanced manufacturing in Taiwan.
In a letter to the Commerce Department last month, TSMC said it was primarily relying on its own capital supplemented by U.S. incentive funds for building the complex in Arizona. It didn’t specify how much money it might get from the government. The company also described challenges at the Arizona site such as unexpected construction snags.