City officials in Phoenix, Arizona, on Wednesday approved a slate of financial incentives and government support for Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) planned US$12 billion chip plant, a step toward bringing high-tech manufacturing to the US and addressing national security concerns over the industry supply chain.
The city agreed to provide about US$200 million to develop roads, sewers and other infrastructure, according to a notice from the city council.
At least one additional set of traffic lights would be included for a cost of approximately US$500,000.
Photo: Cheng I-hwa / Bloomberg
The company is conducting due diligence on several locations in Phoenix with a final decision to be made later.
The decision to locate a plant in Arizona came after US President Donald Trump’s administration warned about the threat inherent in having much of the world’s electronics made outside of the US.
TSMC, the primary chipmaker for firms such as Apple Inc, had negotiated a deal with the administration to create US jobs and produce sensitive components domestically for national security reasons.
The Phoenix project is projected to create about 1,900 new jobs over five years, the company said.
“We appreciate the continuous bipartisan support from the US federal, state and city governments,” a spokeswoman for the company said. “It gives TSMC and its supply chain partners the confidence this and other future investments will be successful.”
TSMC in May said that the facility would utilize its 5-nanometer technology for 12-inch wafer fabrication and have a capacity of 20,000 semiconductor wafers per month, with construction of the plant scheduled to start next year and production to begin in 2024.
The company has said that it hoped to convince its own suppliers to set up operations in the vicinity of its new fabrication facility.
Chip giants Intel Corp and Micron Technology Inc already operate facilities in Arizona, and have helped build a vibrant local semiconductor industry over the years.
TSMC said that subsidies would be critical in setting up a fab in the US, given the additional expenses.
While Phoenix has approved its infrastructure spending, TSMC is still waiting on state and federal subsidies and incentives that could surpass by far the city’s expenditures.
The company would enter a formal deal with the city after selecting a site, which is expected before the end of the year, Reuters reported.
A representative for the city council declined to comment beyond statements in public documents.
“It is remarkable that this came to fruition during a pandemic,” Phoenix Mayor Kate Gallego said in a statement. “The payoff is huge. TSMC will create 1,900 high-tech jobs and foster thousands more related jobs in the semiconductor supply chain ecosystem.”
Additional reporting by CNA
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