Biden seeks $6.6 billion in CHIPS and Science Act funding for new chip factory

By Georgina DiNardo  / April 8, 2024

The Biden administration announced today a proposed $6.6 billion in direct funding under the CHIPS and Science Act to be directed to a preliminary agreement between the Commerce Department and the Taiwan Semiconductor Manufacturing Company (TSMC) to build a third chip factory in Arizona.

The proposed funding would aim to strengthen domestic microchip and semiconductor production while helping speed up artificial intelligence development in areas like consumer electronics, high-performance computing and automotive.

“The proposed funding from the CHIPS and Science Act would provide TSMC the opportunity to make this unprecedented investment and to offer our foundry service of the most advanced manufacturing technologies in the United States,” TSMC Chairman Mark Liu said in a Commerce Department release. “Our U.S. operations allow us to better support our U.S. customers, which include several of the world’s leading technology companies. Our U.S. operations will also expand our capability to trailblaze future advancements in semiconductor technology.”

TSMC has already invested billions into U.S. semiconductor and microchip production and development in Arizona, including two additional manufacturing sites in the state.

“Thanks to this investment, TSMC will also build a third chip factory in Phoenix, increasing its total investment in Arizona to $65 billion and creating over 25,000 direct construction and manufacturing jobs, along with thousands of indirect jobs,” Biden said today.

According to Biden, the U.S. used to produce nearly 40% of the world’s semiconductors, however that number has dwindled down to 10%, none of which include advanced microchips.

Biden said the CHIPS and Science Act, which funds semiconductor domestic research and manufacturing, will help get the U.S. back on track in advanced semiconductor production.

“These facilities will manufacture the most advanced chips in the world, putting us on track to produce 20% of the world’s leading-edge semiconductors by 2030,” he said.

The Commerce Department noted that the proposed funding also seeks $50 million “to develop the company’s semiconductor and construction workforce,” which is in line with the workforce development goals of the CHIPS and Science Act.

This proposed funding would lead to approximately 6,000 direct manufacturing jobs, over 20,000 accumulated construction jobs and tens of thousands of indirect jobs over the decade.

On top of the $6.6 billion in direct funding and the $50 million in workforce development, the CHIPS Program Office would take about $5 billion of proposed loans from the authorized $75 billion in loan authority for the CHIPS and Science Act.

TSMC "has indicated that it is planning to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures,” the release said.