[News] TSMC Receives USD 6.6 Billion for Chipmaking from the US Government, Commits to Constructing Third Fab

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The U.S. government officially announced today that it will provide a USD 6.6 billion subsidy to TSMC, and in its latest press release, confirmed that TSMC will build its third fab in Arizona, USA, with total investment rising to USD 65 billion.

Due to various construction and chip incentive factors, TSMC announced in 2023 that the commissioning of Fab 21 (Fab 1) in Arizona, originally planned for 2024, was postponed to 2025. In January 2024, it was further announced that Fab 2 (originally scheduled to commence operations in 2026) would not begin mass production until 2027 or 2028.

According to the latest information released by TSMC, Arizona’s first fab is on track to begin production leveraging 4nm technology in first half of 2025. The second fab will produce the world’s most advanced 2nm process technology with next-generation nanosheet transistors in addition to the previously announced 3nm technology, with production beginning in 2028.

The third fab will produce chips using 2nm or more advanced processes, with production beginning by the end of the decade. Each of the three fabs, like all of TSMC’s advanced fabs, will have cleanroom area approximately double the size of an industry standard logic fab.

TSMC’s confirmation of plans to build a third fab in Arizona signifies its move towards more advanced semiconductor production in the United States. However, based on the current construction progress in the U.S., market estimates suggest that mass production may not begin until after 2030.

“The CHIPS and Science Act provides TSMC the opportunity to make this unprecedented investment and to offer our foundry service of the most advanced manufacturing technologies in the United States,” said TSMC Chairman Dr. Mark Liu.

“Our U.S. operations allow us to better support our U.S. customers, which include several of the world’s leading technology companies. Our U.S. operations will also expand our capability to trailblaze future advancements in semiconductor technology.”

“We are honored to support our customers who have been pioneers in mobile, artificial intelligence and high-performance computing, whether in chip design, hardware systems or software, algorithms, and large language models,” said TSMC CEO Dr. C.C. Wei.

“They are the innovators driving demand for the most advanced silicon that TSMC can provide. As their foundry partner, we will help them unleash their innovations by increasing capacity for leading-edge technology through TSMC Arizona. We are thrilled by the progress of our Arizona site to date and are committed to its long-term success.”

This market news emerged shortly after the major earthquake in Hualien, Taiwan, leading to speculation within the industry about its connection to the earthquake. Nevertheless, according to industry sources, the recent news about the Fab 3 project in Arizona was not triggered by the recent earthquake but was actually finalized by TSMC after discussions with the U.S. government on future plans.

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(Photo credit: TSMC)