In a move to secure America's semiconductor industry, President Joe Biden's administration has finalized a $6.6 billion award to Taiwan Semiconductor Manufacturing Company (TSMC) for the construction of chip factories in Phoenix, Arizona.
The announcement comes just two weeks after President-elect Donald Trump's victory, signaling an effort to lock in the deal before the new administration takes office.
TSMC, the world's largest contract chipmaker and supplier to major technology companies, including Apple, NVIDIA, AMD, and Qualcomm, plans to invest $65 billion to build three state-of-the-art semiconductor fabrication plants in Arizona.
These facilities are expected to create thousands of jobs and strengthen the United States' position in the global semiconductor supply chain. The first TSMC plant is expected to be fully operational within a few months.
"For the first time in decades, an American manufacturing plant will be producing the leading-edge chips used in our most advanced technologies," Biden said.
The $6.6 billion award to TSMC is part of the CHIPS and Science Act, one of Biden's signature legislative achievements. Signed into law in August 2022, the act allocates $52.7 billion for semiconductor research, manufacturing, and workforce development in the U.S.
Newsweek reached out to Biden's press office via email for comment.
The timing of the award is critical; Trump's previous statements have raised concerns that his incoming administration might attempt to derail subsidies aimed at fostering the domestic chip industry.
"That CHIPS deal is so bad," Trump said on The Joe Rogan Experience podcast on October 25. He has accused Taiwan of swallowing up the U.S. chip industry and questioned the rationale behind giving "billions of dollars to build chips" to foreign companies.
"Taiwan took our chip business from us. I mean, how stupid are we? They took all of our chip business. They're immensely wealthy," Trump told Bloomberg Businessweek in July.
Taiwan's economy minister, Kuo Jyh-huei, denied the allegations, saying, "Of course, Taiwan is not stealing the chip industry from the U.S. The chips we made are commissioned by U.S. companies, which still have the highest gross margin. Trump might have some misunderstanding on such matters, and we will clarify that."
House Speaker Mike Johnson, who voted against the CHIPS Act, initially echoed Trump's sentiments, saying he would work to repeal it if Trump were elected. However, he backtracked after fellow Republicans alerted him to the jobs at stake in their districts should the act be repealed.
The CHIPS Act aims to revitalize domestic chip production, reduce reliance on foreign suppliers, and enhance national security through initiatives such as providing a 25 percent tax credit for semiconductor manufacturing and equipment capital investments.
"America invented the semiconductor, and used to produce nearly 40 percent of the world's chips, but today, we produce only about 10 percent of global supply—and none of the most advanced chips," the White House said in a 2022 statement.
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