The American government is giving $6.60 billion U.S. to Taiwan Semiconductor Manufacturing Co. (TSM) to help fund the construction of microchip fabrication plants in Arizona.
The government funding is coming from the U.S. CHIPS Act that aims to increase America’s chip security and lessen the country’s reliance on foreign made microchips and semiconductors.
TSMC, as the company is known, is spending about $65 billion U.S. to build three cutting-edge fabrication plants in Phoenix, Arizona.
The Taiwanese company, which currently manufacturers about three-quarters (75%) of all the microchips in the world, is also eligible for $5 billion U.S. in loans under the CHIPS Act.
The U.S. government has said that TSMC’s Arizona plants have already created more than 25,000 jobs and attracted 14 semiconductor suppliers to the southwestern state.
The CHIPS Act, passed in August 2022, is a $53 billion U.S. package aimed at building the U.S. domestic microchip and semiconductor industry.
The legislation provides incentives for companies to produce microchips in the U.S. and requires that they do not expand semiconductor manufacturing in China, which is viewed as a national security risk.
TSMC’s Arizona factories are expected to be operational in 2027 and will provide microchips to customers such as Apple (AAPL).
The stock of TSMC has risen 59% in the last 12 months and currently trades at $141.36 U.S. per share.
