Arizona leaders celebrate finalized $6.6B CHIPS Act award to TSMC

PHOENIX — The federal government has finalized its investments in a technology company creating a massive chip-making operation in Phoenix that officials say will bring well-paying jobs for decades to come.

The Taiwan Semiconductor Manufacturing Company (TSMC) is poised to use the $6.6 billion to help create 20,000 construction jobs and 6,000 high-paying manufacturing jobs in Phoenix.

The grant money, which comes from the CHIPS and Science Act, will help TSMC build three plants in which it will manufacture chips used in smartphones, cars, satellites, weapons systems and other electronics.

Building these plants near Loop 303 and 51st Avenue in north Phoenix will ensure the U.S. has a domestic supplier of these essential chips so worldwide crises like the global chip shortage won’t threaten the American economy.

“Today’s final agreement with TSMC … will spur $65 billion dollars of private investment to build three state-of-the-art facilities in Arizona,” President Joe Biden said in a Friday news release.

The timing of the this step is significant, in part, because comments made by President-elect Donald Trump before the election raised concerns he might not follow through with funding commitments made by the Biden administration.

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U.S. Sen. Mark Kelly, an Arizona Democrat, helped negotiate the CHIPS and Science Act.

“Arizona is set to become one of the world’s key centers for leading-edge microchip manufacturing,” he said in a Friday news release. “This is not only a win for Arizona’s economy, but for our national security and our continued global leadership and competitiveness.”

TSMC is expected to begin at-scale microchip production in Phoenix early next year. The first plant will produce the most advanced chips ever made in the U.S.

On the other hand, the second and third plants will manufacture the most advanced chips in the world.

TSMC’s vow to invest over $65 billion marks the largest foreign direct investment in Arizona history.

Where is the money for TSMC Arizona coming from?

TSMC signed a preliminary memorandum of terms for the CHIPS Act funding in April.

The U.S. Department of Commerce recently completed its due diligence, which paved the way for the final agreement.

Phoenix Mayor Kate Gallego, who went to Taiwan to help recruit TSMC in 2019, said this partnership will improve the lives of thousands of residents across the Valley.

“From creating incredible, great-paying union jobs to bolstering the nation’s vital supply chain of this sought-after, advanced technology, there is no question that the CHIPS Act will have generational impacts on our city, region, and nation,” Gallego said in a release.

TSMC Arizona, a local subsidiary of the foreign company, will receive the grant money. It will receive funds as it completes construction, production and commercial milestones.

“Phoenix is proud to lead on the front lines of the American manufacturing revolution and stands ready to continue the strong momentum and partnership the city has with TSMC and its suppliers,” Gallego said.