TSMC begins producing 4-nanometer chips in Arizona, Raimondo says

WASHINGTON (Reuters) -Taiwan Semiconductor Manufacturing Co has begun producing advanced 4-nanometer chips for U.S. customers in Arizona, Commerce Secretary Gina Raimondo told Reuters, a milestone in the Biden administration’s semiconductor efforts.

In November, Commerce finalized a $6.6 billion grant TSMC’s U.S. unit for semiconductor production in Phoenix, Arizona.

“For the first time ever in our country’s history, we are making leading edge four-nanometer chips on American soil, American workers — on par in yield and quality with Taiwan,” Raimondo told Reuters in an interview saying it had begun in recent weeks.

“That’s a big deal — never been done before, never in our history. And lots of people said it couldn’t happen,” Raimondo said.

A spokesperson for TSMC, which reports earnings next week, declined to comment Friday.

In April, TSMC agreed to expand its planned investment by $25 billion to $65 billion and to add a third Arizona fab by 2030.

Congress created a $52.7 billion semiconductor manufacturing and research subsidy program in 2022.

Raimondo told Reuters in an earlier interview that Commerce had to convince TSMC to boost its U.S. plans.

“It didn’t happen on its own… We had to convince TSMC that they would want to expand,” Raimondo said.

TSMC will produce the world’s most advanced 2-nanometer technology at its second Arizona fab expected to begin production in 2028. TSMC also agreed to use its most advanced chip manufacturing technology called “A16” in Arizona.

The TSMC award from Commerce also includes up to $5 billion in low-cost government loans.

Raimondo wants the United States to make 20% of world’s leading-edge logic chips by 2030 — up from the 0% before TSMC began production in Arizona.

Last month, Commerce finalized an award of $407 million to help fund Amkor Technology (NASDAQ:AMKR)’s planned $2 billion advanced semiconductor packaging facility in Arizona, which is set to be the largest of its kind in the U.S.

Amkor’s Arizona plant when fully operational will package and test millions of chips for autonomous vehicles, 5G/6G and data centers. Apple (NASDAQ:AAPL) will be its first and largest customer with the chips produced at a nearby TSMC facility.