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The Biden administration has pledged up to $6.6 billion to Taiwan Semiconductor Manufacturing Co. (TSMC) to expand its facilities in Arizona, allowing the company to produce the most advanced microchips domestically for the first time. Commerce Secretary Gina Raimondo emphasized the importance of these chips in various technologies, including artificial intelligence, national security, and military applications. The funding is part of the CHIPS and Science Act, a $280 billion package aimed at boosting U.S. semiconductor manufacturing and reducing reliance on Asian suppliers.

TSMC is currently building two facilities in Phoenix and is adding a third production hub with the additional funding, bringing its total investment in the projects to $40 billion. The company plans to produce leading-edge microchips at these facilities by the end of the decade, totaling a commitment of $65 billion. These investments are expected to create 6,000 manufacturing jobs, 20,000 construction jobs, and thousands of indirect positions related to chip-related industries in Arizona. The U.S. aims to produce around 20% of the world’s leading-edge chips by 2030 with these investments.

The Biden administration views semiconductor manufacturing as crucial to national security and aims to strengthen domestic chip production to avoid supply disruptions like those experienced during the pandemic-related chip shortage in 2021. The administration has promised tens of billions of dollars to support U.S. chip foundries and reduce reliance on foreign suppliers. Biden highlighted TSMC’s commitment to the United States and its investment in Arizona as part of a broader effort to promote semiconductor manufacturing made in America with support from leading technology firms.

The potential incentives announced by the Biden administration include $50 million to train the Arizona workforce for the new facilities and approximately $5 billion in proposed loans through the CHIPS and Science Act. Senior administration officials emphasized that the focus of the investment announcement was to advance U.S. manufacturing and did not involve giving China a heads up. TSMC CEO C.C. Wei expressed commitment to the long-term success of the Arizona site and the company’s progress in the region. The U.S. government sees TSMC’s expanded presence in Arizona as a significant step for the American semiconductor industry.

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