TSMC stock surged on Monday following a nearly $12 billion agreement with the US to enhance chip manufacturing.
As part of the CHIPS and Science Act, TSMC is poised to receive up to $6.6 billion in grants and $5 billion in direct funding.
This $65 billion endeavor by TSMC marks the largest foreign direct investment in Arizona and the most significant greenfield project in US history.
President Joe Biden’s administration greenlit almost $12 billion in grants and loans for TSMC on Monday, causing shares of Taiwan Semiconductor Manufacturing Company to climb as much as 3.2%.
By midday, TSMC stock had reached an intraday high of $145.92 per share before settling around $143.
The agreement allows TSMC to potentially receive $6.6 billion in grants and $5 billion in direct funding, as outlined in the CHIPS and Science Act established in 2022.
TSMC revealed plans for a third production facility at its upcoming Phoenix location by 2028 to meet the growing demand for semiconductors in the US, with an investment exceeding $65 billion.
The US Department of Commerce also disclosed that the chip-fabrication facilities in Arizona will serve major tech companies such as AMD, Apple, Nvidia, and Qualcomm.
These facilities, in addition to the two existing fab plants, are anticipated to generate 6,000 high-tech jobs and 20,000 construction jobs, according to the Commerce Department.
President Biden emphasized, “TSMC’s renewed dedication to the US and its investment in Arizona reflect a broader narrative of semiconductor manufacturing made in America with the backing of leading US technology firms.”
The collaboration with Taiwan’s top chipmaker aligns with the US’s objective to produce 20% of the world’s cutting-edge chips by 2030 and reduce dependence on China’s high-tech manufacturing amid escalating tensions between the two nations.
TMSC faced a setback last Wednesday when a powerful 7.4-magnitude earthquake struck Taiwan’s east coast, temporarily disrupting operations at some sites.
Original article: Business Insider
