TSMC stock jumps on Biden’s .6 billion funding to boost US chip manufacturing

TSMC stock jumps on Biden’s $11.6 billion funding to boost US chip manufacturing

  • TSMC stock jumped on Monday on a nearly $12 billion deal with the US to boost chip manufacturing.

  • TSMC is set to receive up to $6.6 billion in grants and $5 billion in direct funding under the CHIPS and Science Act.

  • TSMC’s $65 billion marks the largest foreign direct investment in Arizona and the biggest greenfield project in US history.

Shares of Taiwan Semiconductor Manufacturing Company rose as much as 3.2% on Monday as President Joe Biden’s administration approved nearly $12 billion in grants and loans for the world’s leading semiconductor company to boost manufacturing operations in the US.

TSMC stock traded at an intraday high of $145.92 per share around 10:30 am ET, paring that gain to about $143 shortly after 1 p.m.

The deal positions the Taiwanese chip company to receive as much as $6.6 billion in grants and $5 billion in direct funding from the Biden administration as part of the CHIPS and Science Act that was passed in 2022.

In a press release, TSMC unveiled plans for a third production facility at its planned Phoenix site by 2028 to meet rising US semiconductor demand. With an investment exceeding $65 billion, the plan marks the largest foreign direct investment in Arizona and the biggest greenfield project in US history.

In a separate release on Monday, the US Department of Commerce said the chip-fabrication facilities in Arizona will power big tech firms like AMD, Apple, Nvidia, and Qualcomm.

Combined with the previous two fab facilities on track to begin production, the three plants are slated to add 6,000 high-tech jobs and 20,000 construction jobs, the Commerce Department said.

“TSMC’s renewed commitment to the United States, and its investment in Arizona represent a broader story for semiconductor manufacturing that’s made in America and with the strong support of America’s leading technology firms to build the products we rely on every day,” President Biden said in the release.

The cooperation with Taiwan’s largest chipmaker reinforces the US’s goal to produce 20% of the world’s leading-edge chips by 2030 and to reduce reliance on China’s high-tech manufacturing as tensions between the superpowers rise.

Last Wednesday, a powerful 7.4-magnitude earthquake rocked Taiwan’s east coast, temporarily halting TMSC’s operations at some sites.

Read the original article on Business Insider