The U.S. Commerce Department announced on April 9, 2024, that it will grant a $6.6 billion subsidy to Taiwan Semiconductor Manufacturing Company’s (TSMC) U.S. unit for semiconductor production in Phoenix, Arizona. Additionally, TSMC may receive government loans of up to $5 billion at low-interest rates. This subsidy is part of TSMC’s investment plans in the area.

According to the Commerce Department, TSMC has agreed to increase its investment by $25 billion, reaching a total of $65 billion. The company aims to establish a third fab in Arizona by 2030 and intends to manufacture cutting-edge 2-nanometer technology at its Arizona fab, with production expected to commence in 2028.

Commerce Secretary Gina Raimondo emphasized the significance of these chips as components for artificial intelligence and technologies essential for economic development, modern military operations, and national security.

TSMC had previously disclosed plans for a $40 billion investment in Arizona. The company anticipates starting large-scale production at its U.S. fab by the first half of 2025, according to Commerce Department sources.

TSMC also mentioned in a statement that its factories in Arizona are working towards reaching a 90% water recycling rate. They have also begun planning the construction of a water reclamation facility with the aim of achieving “near zero liquid discharge.”

In addition to TSMC’s support, the Commerce Department recently announced grants totaling $8.5 billion and up to $11 billion in loans for Intel to assist in chip production. There are also plans for an award for Samsung Electronics from South Korea that are expected to be revealed by the department.