Newsletter
A major announcement was made today by the United States Commerce Department. The announcement reveals an unprecedented financial commitment to support semiconductor production within the country. Eventually, this strategic decision entails a considerable $6.6 billion subsidy granted to Taiwan Semiconductor Manufacturing Company (TSMC), a key chip supplier for tech giant Apple. Certainly, by leveraging the CHIPS and Science Act, this initiative marks a crucial advancement in enhancing the United States’ semiconductor manufacturing capabilities.
Accompanying the announcement, the White House detailed the subsidy specifics. TSMC is set to receive a significant cash injection to boost semiconductor production in Phoenix, Arizona. On top of that, the chipmaker will also gain access to $5 billion in loans and qualify for an investment tax credit of up to 25% of capital expenses. These attractive incentives are geared towards driving substantial growth for TSMC in the United States.
Unprecedented investment in U.S. semiconductor industry
TSMC has made a decision to invest $25 billion, marking a significant turning point in the U.S. semiconductor industry. This investment will bring their total investment in the sector to an unprecedented $65 billion. Hence, the investment makes it the largest foreign direct investment in a new U.S. project in history.
TSMC’s bold vision goes beyond just financial commitments. The chipmaker is planning to build a third fabrication plant in Arizona by 2030, strengthening its presence in the region. The first TSMC plant in Arizona will start making innovative 4nm chips next year. The second plant, originally designed for 3nm chip production, will also produce 2nm chips by 2028. The third plant will focus on producing 2nm chips, positioning itself as a leader in cutting-edge semiconductor technology. This marks an exciting step towards future technological advancements.
Impacts on Apple and the supply chain
The ramifications of this massive investment go far beyond TSMC and the semiconductor sector. Notably, Apple is set to benefit from TSMC’s increased chip production in the US. Nevertheless, at present, Apple’s most advanced chips are made in Taiwan utilizing TSMC’s state-of-the-art 3nm process. Consequently, the possibility of making chips, including stronger versions, within the U.S. marks a big shift in the company’s supply chain.