Chipmaker TSMC boosts US investment to $65b with $6.6b grant

Photo credit: TSMC

Supported by a US$6.6 billion federal grant, chipmaking giant Taiwan Semiconductor Manufacturing Co. (TSMC) is planning to boost its US investment by over 60%, driving up its total to exceed US$65 billion, Nikkei Asia reported.

This marks the largest foreign direct investment (FDI) in the US for a greenfield project, the report said, citing US Commerce Secretary Gina Raimondo. Bolstered by the added funds, the US would be on pace to make around 20% of the world’s top-tier chips by 2030.

The Taiwan-based company is building three facilities in the US. Located in Arizona, TSMC’s inaugural plant is expected to churn out 4-nanometer chips and will start making them in 2025.

The second plant, initially designated to manufacture 3-nanometer chips, will now also accommodate the production of 2-nanometer chips. Production at this facility is scheduled to commence by 2028.

A third plant is also in the works. Estimated to be functional by 2030, it will produce more advanced 2-nanometer chips.

Despite these plans, issues like labor shortages and lengthy approval periods for permits have delayed the first factory’s production by a year. To address these problems, TSMC is considering importing Taiwanese talent.

TSMC is the biggest contract chip manufacturer globally and supplies to major chip developers such as Apple, Nvidia, Qualcomm, and Amazon. As tech firms race to catch generative AI wave, TSMC said its revenue could surge by 26%.

The company also announced in January that its net revenue grew by 14.4% quarter over quarter to US$19.6 billion in Q4, fueled by recent advancements in semiconductor tech. However, its overall 2023 revenue is still down 8.7% year on year at US$69.3 billion.

See also: Can chiplets power China’s genAI ambition?