TSMC agrees to build third Arizona fab, make 2nm chips in US

News | April 8, 2024

By Peter Clarke

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TSMC has said it plans to make 2nm chips at its second fab in Arizona by 2028 and that it will also build a third fab at the campus.

The third fab will produce chips using 2nm or more advanced processes, with production beginning by the end of the decade.

The news came alongside the announcement that TSMC will receive up to an additional US$6.6 billion in funding under the CHIPS and Science Act.

TSMC’s spend in Arizona is being increased from about US$40 billion to more than US$65 billion and its government subsidy goes up to US$11.6 billion across three wafer fabs.

Previously TSMC had said that it is on track to make 4nm chips in a first Arizona fab in 1H25 and would make 3nm chips at the second fab with production beginning in 2028.

The latest agreements are covered by a non-binding preliminary memorandum of terms (PMT) signed by TSMC and the US Department of Commerce.

“The CHIPS and Science Act provides TSMC the opportunity to make this unprecedented investment and to offer our foundry service of the most advanced manufacturing technologies in the United States,” said Mark Liu, TSMC chairman, in a statement. “Our US operations allow us to better support our US customers, which include several of the world’s leading technology companies. Our US operations will also expand our capability to trailblaze future advancements in semiconductor technology.”

TSMC’s three Arizona fabs are expected to create approximately 6,000 direct high-tech, high-wage jobs, 20,000 construction jobs during the build-out phase, and tens of thousands of indirect supplier and consumer jobs.

In addition to the proposed US$6.6 billion in direct funding, the PMT also proposes to provide TSMC with up to US$5 billion in loans. TSMC will also qualify for tax credits worth up to 25 percent of qualified capital expenditure at TSMC Arizona.