Taiwan Semiconductor Mfg. Co. Ltd (NYSE:TSM)) is set to receive $6.6 billion from the US government toward plans to build chipmaking plants in America, plus up to $5 billion in low-cost loans.
The White House offered the funding on Monday under the US CHIPS and Science Act, which will support the Taiwanese firm’s US$65 billion US investment plans.
Three cutting-edge fabrication plants will be built in Phoenix, Arizona, with construction beginning for the first next year.
TSMC had originally planned to invest US$25 billion in two US plants, with Monday’s non-binding deal seeing the firm agree to add a third by 2030.
“These are the chips that underpin all artificial intelligence,” Commerce Secretary Gina Raimondo commented in the White House statement.
“They are the chips that are necessary components for the technologies that we need to underpin our economy, but frankly, a 21st-century military and national security apparatus.”
The 2022 CHIPS Act includes some US$53 billion worth of funding aimed at incentivising domestic chip production in the US.
Intel was awarded US$8.5 billion CHIPS grant last month to develop production sites in Arizona and Ohio.
TSMC, which supplies to the likes of NVIDIA Corp and Apple Inc (NASDAQ:AAPL, ETR:APC), will produce tens of millions of chips for smartphones, autonomous vehicles, and AI data centers from the US sites, the commerce department added.
TSMC climbed 2% to US$144.21 in pre-market trading.