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The Phoenix city government of the United States reached a chip factory development agreement with TSMC, which plans to invest US$12 billion.

Published :11/19/2020 7:59:41 AM

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According to reports, officials from Phoenix, Arizona, voted unanimously on Wednesday to approve a development agreement with TSMC. The Phoenix City Fund will allocate US$205 million to optimize the supporting roads and water supply facilities of the local TSMC factory. TSMC plans to invest 12 billion U.S. dollars to build factories there.


As the world's largest chip foundry, TSMC currently produces chips for Apple, Qualcomm and many other technology companies. In May of this year, TSMC disclosed that it plans to build a 5-nanometer process chip factory in Arizona, which will be the company's first advanced manufacturing facility in the United States. Earlier this month, the company approved an investment to invest $3.5 billion in capital to establish a wholly-owned subsidiary in the state.

The Phoenix City Council voted 9 to 0 and approved the city government to reach this agreement. Before the vote, Phoenix City Mayor Kate Grego stated that the agreement "is a great success for all levels of government in helping Arizona become a leader in advanced manufacturing."

According to the agreement, TSMC will build a new factory in 5 years and create 1,900 new full-time jobs. The construction of the factory will start in early 2021 and is expected to be put into production in 2024.

As a supporting facility, Phoenix will spend US$61 million to build a 3-mile road, spend US$37 million to improve water supply facilities, and spend US$107 million to optimize wastewater treatment facilities. TSMC will reach a formal agreement with the Phoenix City Government after the final site selection is completed, and the site selection is expected to be completed before the end of this year.

TSMC has previously stated that it hopes to receive US federal subsidies to help cover the additional cost of producing chips in the United States. Most of the world's advanced semiconductor products are produced in Taiwan, including chips used in the US military.

Members of the US Congress proposed in June this year to provide billions of dollars in subsidies to help support the advanced semiconductor industry in the United States. These funds may benefit TSMC, as well as US companies such as Intel and Micron.