The United States has finalized a major agreement to provide up to $6.6 billion in direct funding to Taiwan Semiconductor Manufacturing Company (TSMC), the global leader in advanced chip manufacturing. 

This historic deal, announced by the Biden administration, is part of a broader strategy to boost semiconductor production within the U.S. to strengthen national security and reduce dependence on foreign sources.

The funding will help TSMC establish three state-of-the-art facilities in Arizona, with an estimated $65 billion in additional private investment to make this a reality. These plants are expected to play a pivotal role in the production of advanced semiconductor chips for AI, 5G/6G smartphones, high-performance computing, and even military technology.

The first of these TSMC plants is set to open by early 2025, and once all three are fully operational, they will collectively manufacture tens of millions of cutting-edge logic chips. In addition to direct government funding, the U.S. is extending up to $5 billion in loans to support the TSMC Arizona plants, highlighting the strategic importance of this partnership.

The Commerce Department projects that these facilities will generate approximately 6,000 direct manufacturing jobs, reinvigorating the semiconductor sector on U.S. soil. Historically, the U.S. was responsible for around 40% of global chip production, but that figure has fallen to just 10%, with no production of leading-edge chips in recent years.

This announcement also marks a significant step for the CHIPS Act, a law passed under Biden to revitalize America’s semiconductor industry. However, with Donald Trump set to take office shortly, the future trajectory of this initiative remains a point of interest, as Trump has been critical of the CHIPS Act.