Taiwan Semiconductor Manufacturing Co. is moving forward with its plans to invest up to $3.5 billion for its Phoenix factory, according to a new Reuters report.
The chip giant, which makes a large portion of the world’s semiconductor chips, said on Tuesday that its board had approved a plan to increase the capital investment for its Arizona factory by up to $3.5 billion.
The approval comes two months after TSMC confirmed its plans to triple its investment in Arizona to $40 billion, a significant increase from its initial $12 billion investment. The potential $3.5 billion is part of the overall $40 billion investment.
TSMC celebrated the arrival of the first batch of production equipment for its Phoenix factory in December after previously confirming that it had started construction on a second fab in Phoenix.
The company’s first Arizona fab is expected to be completed by 2024 and produce 4-nanometer chips, while its second is scheduled to be operational by 2026 and produce TSMC’s 3-nanometer chips.
The Business Journal previously reported that the company could eventually build six total factories at its 1,000-acre north Phoenix campus. TSMC is also working with more than 40 suppliers that are moving or expanding in Arizona.
The two Arizona fabs are expected to manufacture more than 600,000 wafers, which are used to manufacture chips, per year, according to the company.
The U.S. and Arizona have in recent months made a concerted effort to boost the industry through the CHIPS and Science Act, which was signed into law in August 2022 and includes $52 billion in incentives to boost the country’s semiconductor industry. The next phase of the act is expected to start in February, reports say.
Although many semiconductor companies have applauded the U.S.’s efforts to boost the industry through the CHIPS Act, experts like TSMC founder Morris Chang have said this is only a start for the U.S. to regain a stronghold in the industry, according to a new Politico report.
TSMC, as well as its suppliers, have identified challenges in increased costs and regulations for construction while trying to build in Phoenix compared to overseas. TSMC has listed this as reasons why incentives such as the CHIPS Act are critical for building its ecosystem of suppliers and related companies.
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