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U.S. finalized up to $6.6 billion in CHIPS funding for TSMC’s Arizona expansion

The April 2024 preliminary TSMC deal became a finalized November 2024 award. The first Arizona fab now produces 4nm chips, while TSMC’s broader campus plan has grown to about $165 billion.
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The U.S. Department of Commerce finalized an award of up to $6.6 billion in direct CHIPS Act funding for Taiwan Semiconductor Manufacturing Co. (TSMC) on November 15, 2024. The package also makes available up to $5 billion in proposed government loans. TSMC’s first Arizona fab entered high-volume 4-nanometer production in the fourth quarter of 2024, while the company has expanded its longer-term Arizona investment plan to approximately $165 billion.

The support is milestone-based—not an unconditional $11.6 billion cash payment—and the expanded campus remains a multiyear construction and execution project.

What the U.S. actually awarded

On April 8, 2024, Commerce announced preliminary, non-binding terms for TSMC Arizona. After due diligence and negotiations, Commerce announced the binding direct-funding award on November 15, 2024. The final package contains separate forms of support:

Support Amount and meaning
CHIPS direct funding Up to $6.6 billion through the CHIPS Incentives Program. Disbursements depend on construction, production and commercial milestones.
Proposed government loans Up to $5 billion for eligible capital expenditures under the CHIPS Act loan program. This is debt financing, not a grant.
Investment Tax Credit TSMC indicated it planned to seek the Treasury Department’s Investment Tax Credit, expected to cover up to 25% of qualified capital expenditures.
Private investment Government support is intended to help catalyze TSMC’s much larger private investment in Arizona.

Commerce’s April announcement described the terms as a preliminary memorandum of terms subject to final documents; it did not represent a completed award. The final announcement is documented by the Department of Commerce.

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What the original project included

The 2024 award was built around more than $65 billion of planned investment in three greenfield fabs in north Phoenix. Commerce and TSMC estimated approximately 6,000 direct high-tech manufacturing jobs and more than 20,000 unique construction jobs for the initial three-fab project. Those figures are announced estimates, not a guarantee that every position has already been created.

Fab 1: 4nm production

The first fab is designed for 4-nanometer FinFET logic manufacturing. TSMC later reported that it reached high-volume production in the fourth quarter of 2024, ahead of the earlier expectation that production would begin in the first half of 2025.

Fab 2: 3nm and newer processes

The second fab is planned for 3nm and more advanced technologies. TSMC’s current target is high-volume manufacturing in the second half of 2027.

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Fab 3: N2 and A16

The third fab began construction in 2025 and is planned for TSMC’s N2 and A16 technologies, with production targeted later in the decade. A process label such as 4nm, 3nm or 2nm is an industry name for a technology generation; it is not a literal measurement of every transistor feature.

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How far the Arizona campus has progressed

  • Fourth quarter 2024: Fab 1 entered high-volume 4nm production, according to TSMC.
  • 2025: The structure of Fab 2 was completed, and construction began on Fab 3.
  • April 2025: TSMC broke ground on Fab 3.
  • 2025–2026: TSMC described the site as developing toward an independent “GIGAFAB” cluster and said it was accelerating the second fab’s schedule.
  • 2026: TSMC reported acquiring additional land to preserve room for expansion.

These updates describe progress at the site, not completion of all planned fabs or facilities. TSMC’s project page provides the company’s current status at TSMC Arizona.

Why the headline amount is not an upfront payment

“Up to” is important. The direct funding is capped at $6.6 billion and is released as agreed construction, production and commercial milestones are met. The proposed loans are available for qualifying capital expenditures and would create repayment obligations. The award therefore cannot be treated as $11.6 billion in grants deposited at once.

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TSMC’s securities filings describe the funding and loan agreements, guarantees and related contractual conditions. The broader federal loan authority cited by Commerce is $75 billion, but that authority is not money awarded solely to TSMC.

TSMC’s plan grew to approximately $165 billion

In March 2025, TSMC announced an additional $100 billion of planned U.S. investment, bringing its stated Arizona investment plan to approximately $165 billion. The expanded concept adds:

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  • Three additional fabrication plants;
  • Two advanced-packaging facilities; and
  • A major research and development center.

This $165 billion figure is TSMC’s expansion plan, not the value of the federal CHIPS award. Future facilities remain subject to demand, financing, permitting, workforce, utility and construction risks. The company’s 2025 annual report and 2026 annual-meeting minutes describe the later-stage plans and progress.

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Why Washington considers the project strategic

The Biden administration has presented the investment as both an economic-security and national-security measure. The policy rationale is to increase U.S. access to advanced logic chips used in artificial intelligence, high-performance computing, data centers, smartphones, automobiles, communications equipment and defense systems, while reducing exposure to disruptions in overseas production.

Commerce identified companies including Apple, AMD, Nvidia and Qualcomm as having demand for advanced U.S.-manufactured capacity. Potential beneficiaries also include Arizona construction and engineering firms, utilities, semiconductor suppliers and workers in manufacturing, process engineering and equipment maintenance. These are potential or projected benefits, not guaranteed outcomes.

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The limits and trade-offs

Domestic fabs do not make the whole supply chain domestic

A Phoenix fab can diversify where advanced wafers are manufactured, but semiconductor production still relies on internationally sourced equipment, chemicals, materials, chip design, packaging and other specialized inputs. The project does not make the United States self-sufficient in semiconductors.

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Cost and execution remain material questions

Building and operating leading-edge fabs in Arizona requires large amounts of skilled labor, reliable power and water, specialized construction and a supporting supplier ecosystem. Workforce training and apprenticeship commitments are part of the project’s development challenge. Exact future costs, production mixes and completion dates for the expanded campus remain uncertain.

Technology parity arrives in stages

Arizona did not begin by matching every process available in Taiwan. It started with 4nm production; 3nm is targeted for the second fab in the second half of 2027, and N2/A16 are planned for the third fab later in the decade.

What readers should watch next

  • Whether TSMC meets the second fab’s second-half-2027 high-volume-production target.
  • Construction and commissioning milestones for Fab 3 and the additional facilities.
  • The amount and timing of direct funding and loan proceeds actually drawn under the agreements.
  • Whether the planned packaging and R&D operations are delivered alongside wafer fabrication.
  • Evidence that announced job and supply-chain benefits materialize rather than remain projections.

The contractual structure of the award is described in TSMC’s 2024 Form 20-F, while the company’s latest disclosed Arizona status appears in its 2025 Form 20-F.

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