US secures chip factory with multibillion-dollar subsidies

JOE BIDEN has handed $11bn (£8.7bn) in grants and loans to Taiwanese tech giant TSMC to build an advanced semiconductor plant in Arizona.

TSMC yesterday confirmed it plans to make its most advanced chips, the so-called “2-nanometre” designs, in the state after a boost for US capabilities.

The company had already announced plans to invest $40bn to build the plant in Phoenix, Arizona, but has now raised that commitment by a further $25bn, making it the single biggest foreign investment project in American history, said Gina Raimondo, the US commerce secretary.

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

The White House has pledged to boost US manufacturing of advanced microchips from effectively zero today.

President Biden said the decline of America’s own semiconductor industry had left it exposed to “significant economic and national security vulnerabilities”.

The Biden administration has been seeking to harden America’s technology supply chains amid fears of a Chinese invasion of neighbouring Taiwan which is home to the world’s biggest chip making companies, which produce billions of the tiny semiconductors that are used in everything from smartphones to data centres and cars. The US has unleashed a wave of sanctions to scupper China’s access to advanced semiconductors, which officials fear could be put to military use by Beijing.

TSMC, which is valued at more than $700bn, makes some of the most cutting-edge designs in its high-tech “fabs”.

Its foundries also produce the silicon chips that are needed for the supercomputers and graphics processors that can train and run artificial intelligence (AI) algorithms.

Washington has agreed to offer grants of up to $6.6bn to fund the new Arizona plant, as well as up to $5bn in loans to TSMC, under President Biden’s $52bn Chips Act.

The project is expected to create 6,000 direct jobs and more than 20,000 construction roles, TSMC said.

The White House recently also handed $8.5bn in funding to Intel to invest in US chip manufacture. Intel has said it intends to invest up to $100bn over the next five years.

Last week, TSMC was briefly forced to halt production of microchips after a magnitude 7.4 earthquake hit Taiwan – the strongest to strike the island in 25 years.