Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, has commenced production of advanced 4-nanometer chips at its Arizona facility, marking a historic milestone in U.S. semiconductor manufacturing. According to Commerce Secretary Gina Raimondo, this is the first time leading-edge chips are being produced on American soil, with quality and yield comparable to TSMC's operations in Taiwan.

“This has never been done before in U.S. history,” Raimondo said. “Many doubted it could happen, but we've proven otherwise.”

Federal Support Spurs TSMC Expansion

The U.S. Commerce Department has granted $6.6 billion to TSMC's Arizona unit as part of the federal government's $52.7 billion program to boost domestic semiconductor manufacturing and research. TSMC has also expanded its total U.S. investment to $65 billion, including the addition of a third Arizona fab set to begin operations by 2030.

The second Arizona fab, slated to launch production in 2028, will utilize 2-nanometer technology, the world's most advanced chip-making process. TSMC has also agreed to deploy its cutting-edge "A16" manufacturing technology in Arizona. To further support these efforts, the U.S. government has approved up to $5 billion in low-cost loans for the company.

Raimondo emphasized that Commerce had to actively persuade TSMC to scale up its U.S. plans:

“It didn't happen on its own … We had to convince TSMC to expand.”

Expanding U.S. Semiconductor Capacity

TSMC's Arizona fabs are a cornerstone of Raimondo's vision to produce 20% of the world's leading-edge logic chips domestically by 2030, a significant leap from 0% before TSMC's U.S. operations began. The first fab is expected to achieve high-volume production by mid-2025.

In addition to TSMC's investments, Commerce has allocated $407 million to Amkor Technology to develop a $2 billion advanced semiconductor packaging facility in Arizona, the largest of its kind in the United States. The plant will test and package millions of chips for applications like autonomous vehicles, 5G/6G, and data centers.  Apple is set to be its primary customer, sourcing chips from TSMC's nearby facility.

Strengthening U.S. Technological Leadership

These initiatives highlight the Biden administration's commitment to revitalizing domestic semiconductor manufacturing and reducing reliance on foreign suppliers. By attracting major players like TSMC and Amkor, the U.S. aims to secure its leadership in advanced technologies, ensuring long-term economic and national security benefits.