The U.S. government has awarded $6.6 billion U.S. to Taiwan Semiconductor Manufacturing Co. (TSM) for a new production plant in Phoenix, Arizona.
The contract is part of the $52.7 billion U.S. CHIPS Act that was created in 2022 and aims to make America self-sufficient in the manufacturing of microchips and processors.
Earlier this year, TSMC, as the company is known, agreed to expand its planned investment in the U.S. by up to $65 billion U.S. and add a third Arizona fabrication plant by 2030.
The Taiwanese company’s Arizona plant is expected to begin production in 2028. TSMC has also agreed to use its most advanced chip manufacturing technology, called “A16,” in America.
The TSMC award also includes an additional $5 billion U.S. in low-cost government loans.
In a written statement, TSMC said the U.S. funding, “Helps us to accelerate the development of the most advanced semiconductor manufacturing technology available in the U.S.”
The U.S. Congress in 2022 approved the Chips and Science Act to boost domestic semiconductor production.
So far, the U.S. government has allocated $36 billion U.S. for various microchip projects, including $8.5 billion U.S. for Intel (INTC) and $6.1 billion U.S. for Micron Technology (MU).
The stock of Taiwan Semiconductor has risen 86% so far in 2024 and is currently trading at $188.50 U.S. per share.