TSMC To Win $5B Grant For US Plant To Service Apple, Nvidia Chip Demand: Report – Apple (NASDAQ:AAPL), Ad – Benzinga
Taiwan Semiconductor Manufacturing Corp. TSM is expected to win up to $5 billion in grants from the U.S. government for building a chip fabrication facility in Arizona.
Bloomberg reported on Friday, citing sources familiar with the matter, that the world’s largest contract chipmaker would soon be announcing the deal, although it wasn’t clear whether the award would come from the $52 billion CHIPS Act fund for boosting U.S. semiconductor manufacturing.
In May 2020, TSMC announced plans to invest $12 billion in a semiconductor manufacturing facility in Phoenix, Arizona, aiming to bolster its production capacity in the United States. Then in December the same year, plans for a second fab — again, in Phoenix — were announced, taking the total investment to $40 billion.
The company said at the time: “As one of TSMC's advanced fabs, TSMC Arizona will play a vital role in the U.S. government's goal to onshore semiconductor manufacturing and strengthen national economic competitiveness.”
Construction of the first fab began in April 2021 and volume production is expected to begin in the first half of 2025. The second fab is expected to be operational two or three years later.
The company already operates a U.S. fab in the State of Washington.
Also Read: GlobalFoundries To Scoop $1.5 Billion In CHIPS Act Grants: What It Means For Semiconductor Sector
TSMC’s largest customer is Apple Inc. AAPL, which it calls “Customer A” on its Securities and Exchange Commission filings, accounted for 25%, or $17.5 billion, of the chipmaker’s annual revenue in 2023, according to financial analyst and tech writer Dan Nystedt.
Although the company doesn’t disclose its business dealings and customer details, it is widely believed that the company designated as “Customer B” in last year’s filing is Nvidia Corporation NVDA, which was responsible for 11%, or $7.73 billion of TSMC’s net annual revenue.
Among its other customers are Advanced Micro Devices Inc. AMD, Broadcom Inc. AVGO and Qualcomm Inc. QCOM, all of which, along with both Apple and Nvidia, are based in California, making TSMC’s Phoenix location rather handy.
Further details of TSMC’s federal grant and other awards under the CHIPS Act are expected to be announced over the coming days and weeks as President Joe Biden looks to cement the program as he ramps up his re-election campaign.
The only official announcement of a CHIPS Act grant so far, has been GlobalFoundries Inc. GFS, which was awarded $1.5 billion to expand production facilities at its plant in Malta, New York and its Vermont facility.
The Act was launched in 2022 to boost domestic production of semiconductors after crippling supply chain issues in the industry caused massive production delays for several industries.
Now Read: Biden’s State Of The Union May Coincide With Government Shutdown: What To Expect, Sectors To Watch
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