Semiconductor foundry TSMC announced that the U.S. Department of Commerce and TSMC Arizona have signed a non-binding preliminary memorandum of terms (PMT) for up to $6.6 billion in direct funding under the CHIPS and Science Act. The company also revealed plans to build a third fab at its Arizona subsidiary, using advanced semiconductor process technology.

With the addition of the third fab, TSMC’s total capital expenditure for the Phoenix, Arizona site will exceed $65 billion, making it the largest foreign direct investment in Arizona history and the largest foreign direct investment in a greenfield project in U.S. history, TSMC said in a statement.

TSMC Arizona’s three fabs are expected to create approximately 6,000 direct high-tech, jobs. According to the Greater Phoenix Economic Council, the increased investment in three fabs will create more than 20,000 unique construction jobs.

TSMC Arizona’s first fab is scheduled to begin production using 4nm technology in the first half of 2025. The second fab will produce chips using 2nm and 3nm process technologies, with production beginning in 2028. The third fab will produce chips using 2nm or more advanced processes, with production starting by the end of the decade.

In addition to the proposed $6.6 billion in direct funding, the PMT also proposes to provide TSMC with up to $5 billion in loans. TSMC plans to apply for U.S. Treasury Department Investment Tax Credits of up to 25% of the qualified capital expenditure at TSMC Arizona.

All TSMC overseas investments are subject to regulatory approvals in Taiwan as necessary.

[Image courtesy: TSMC]