Phoenix okays development deal with TSMC for $12 billion chip factory

In this news, we discuss the Phoenix okays development deal with TSMC for $12 billion chip factory.

(Reuters) – Officials in the city of Phoenix, Ariz. Voted unanimously on Wednesday to authorize a development deal with chipmaker Taiwan Semiconductor Manufacturing Co that would provide $ 205 million in municipal funds for infrastructure such as roads and water improvements for a planned $ 12 billion semiconductor plant in the city.

TSMC is the world’s largest contract chip maker and manufactures semiconductors for Apple Inc, Qualcomm Inc, and a range of other technology companies. The company in May announced plans to build a 5-nanometer chip factory in Arizona, which would be its first advanced manufacturing facility in the United States. Earlier this month, he approved an investment to create a wholly-owned subsidiary in the U.S. state with paid-in capital of $ 3.5 billion.

Phoenix City Council voted to allow the city to close the deal with a 9-0 vote. Ahead of the vote, Phoenix Mayor Kate Gallego called the deal “a great success across so many levels of government in helping Arizona become a leader in advanced manufacturing.”

Under the agreement, TSMC will build a new plant and create 1,900 new full-time jobs that will be phased in over a five-year period. Construction would begin in early 2021, with factory production scheduled for 2024.

In return, the city will build three miles of streets for $ 61 million, spend $ 37 million on improving water infrastructure and $ 107 million on improving wastewater. The company will enter into a formal agreement with the city after selecting a site, which is expected before the end of the year.

Based in Hsinchu, Taiwan, TSMC said it was also hoping for US federal grants to help cover the additional cost of building chips in the United States. Most of the world’s advanced semiconductors are made in Taiwan, including those used in US military equipment, which has become a cause for concern as tensions rise between the United States and China.

U.S. lawmakers in June proposed billions of dollars in grants to help support advanced semiconductor manufacturing in the United States. These funds could benefit both TSMC and US companies such as Intel Corp and Micron Technology Inc.

Reporting by Stephen Nellis in San Francisco; edited by Diane Craft and David Gregorio

Original © Thomson Reuters Corporation

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