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Apple chipmaker TSMC will receive a massive $11.6 billion in subsidies and loans as part of its plan to open three factories in the United States. The deal consists of $6.6 billion in grants and about $5 billion in loans and is intended to help TSMC get its factories up and running as part of the Biden administration’s efforts to expand production of domestic technology components.
TSMC is a key supply partner for companies including Apple, and is responsible for producing the chips that power everything from top-of-the-line iPhones, Macs, iPads, and more. For example, the upcoming OLED iPad Pro and refreshed iPad Air will both use TSMC’s M-series chips, while the iPhone 16 and iPhone 16 Pro will also rely heavily on the company’s efforts.
Plans for TSMC to bring some of its production capacity to the United States have been in the works for years, and the new factory has been the subject of much controversy. Problems with labor unions and concerns about future support from the U.S. government are thought to be just two reasons why the plan failed. One of the factories, which was supposed to start producing chips in 2026, will not open until 2028. As part of this new deal, TSMC is said to be building a third factory in Phoenix.
Long live Chip Chip!
The news, reported by Bloomberg, comes days after TSMC had to close its Taiwanese factory following an earthquake in the region. The factory is currently reportedly restarting production with limited impact.
As for the company’s U.S. operations, the new package will support investments totaling more than $65 billion across TSMC’s three factories, Bloomberg reported. The third will be responsible for building next-generation 2nm chips, which are expected to be operational by the end of 2020.
“Now, for the first time, the most advanced semiconductor chips on the planet will be manufactured at scale here in the United States, using American workers,” said Secretary of Commerce Gina Raimondo. is reported to have said. Briefing before presentation. TSMC has not yet started producing 2nm chips anywhere in the world, but it plans to do so in 2025.
“The proposed CHIPS and Science Act funding provides TSMC with the opportunity to make this unprecedented investment and provide foundry services for cutting-edge manufacturing technology in the United States,” said Mark Liu, Chairman of TSMC. “It will happen,” he reportedly said.
This latest deal with TSMC is part of the larger Chip and Science Act of 2022, which secures $39 billion in subsidies, as well as $75 billion worth of loans and guarantees, to attract production to the United States. It is.
However, it remains to be seen how Apple will benefit from this news. It has been reported that Apple’s iPhone and Mac chips will no longer be produced at TSMC’s Arizona factory in the second half of 2022. The plan at the time was to produce chips based on technology already in use in Taiwan. And if Apple wants to be on the cutting edge, it will need to source its chips from TSMC’s home country rather than the United States. state. Apple may continue to use domestically manufactured chips, but those chips won’t be at the forefront of TSMC’s manufacturing technology.
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