US Provides $6.6 Billion in Government Support to TSMC for Arizona Factory Construction

Forex - The U.S. Department of Commerce announced that it has finalized a $6.6 billion federal support for TSMC's semiconductor production in Arizona. The binding agreement follows a preliminary deal announced in April and marks the first major incentive completed under the $52.7 billion program established in 2022. This agreement was signed just a few weeks before the inauguration of the administration of then-President Donald Trump, who criticized the program. In April, TSMC agreed to increase its planned investment by $25 billion to $65 billion and to add a third factory in Arizona by 2030. The Taiwanese company is set to produce the world's most advanced 2-nanometer technology at its second Arizona factory, expected to begin production in 2028. TSMC has also agreed to utilize the most advanced chip manufacturing technology known as "A16" in Arizona. Commerce Secretary Gina Raimondo stated, “When we started this, there were many skeptics saying that TSMC would produce 5 or 6 nanometer in the U.S. In fact, they are making their most sophisticated chips right here in the United States.” The award to TSMC also includes low-cost federal loans of up to $5 billion. Under the agreement, TSMC will receive cash as it meets project milestones. A senior official told reporters that the department anticipates providing at least $1 billion to TSMC by the end of the year.