U.S. Commerce Secretary Gina Raimondo told Reuters that Taiwan Semiconductor Manufacturing Co. (TSMC) has begun producing advanced 4-nanometer chips for U.S. customers in Arizona, a milestone in the Biden administration’s semiconductor manufacturing and research and development efforts.
In November, the Commerce Department finalized a $6.6 billion grant to TSMC’s U.S. unit to produce semiconductors in Phoenix, Arizona.
“For the first time in our country’s history, we are making cutting-edge 4-nanometer chips, on American soil, with American workers – with the same output and quality as Taiwan,” Raimondo told Reuters in an interview. She said production had begun in recent weeks.
The start of production had not been previously disclosed. “This is a big deal – it’s never been done, never in our history. A lot of people said it couldn’t happen,” Raimondo said.
TSMC is the world’s largest chip contractor and a major supplier to Apple and Nvidia. The company will report revenue next week. A TSMC spokesman declined to comment on Friday (January 10).
Last April, TSMC agreed to increase its planned investment by another $25 billion to $65 billion and add an Arizona plant by 2030, which would be TSMC’s third plant in the state.
Congress established a $52.7 billion semiconductor manufacturing and research subsidy program in 2022. As part of the program, the U.S. Department of Commerce persuaded all five cutting-edge semiconductor companies to set up factories in the United States.
Raimondo told Reuters earlier that the Commerce Department had to persuade TSMC to expand its U.S. plans.
“It didn’t happen on its own. … We had to convince TSMC that they wanted to expand.”
TSMC will produce the world’s most advanced 2-nanometer technology at its second wafer plant in Arizona, which is expected to start production in 2028. TSMC has also agreed to use its most advanced chip manufacturing technology, “A16,” in Arizona.
The Commerce Department’s concession to TSMC also includes up to $5 billion in low-cost government loans.
Raimondo hopes that the United States will produce 20% of the world’s cutting-edge logic chips by 2030, compared to zero before TSMC started production in Arizona.
Last April, the U.S. Department of Commerce said TSMC expects to begin high-volume production at its first U.S. plant in the first half of 2025.
Last month, the Commerce Department finalized a $407 million grant to fund Amkor Technology’s planned $2 billion advanced semiconductor packaging facility in Arizona, which will be the largest of its kind in the United States.
When fully operational, Amkor’s Arizona plant will package and test millions of chips for self-driving cars, 5G/6G, and data centers. Apple will be its first and largest customer, with the chips manufactured by a nearby TSMC facility.