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Phoenix approves development deal with TSMC for $12 billion fab

Southwestern American city will provide US$205 million for infrastructure improvements

TSMC logo (Reuters photo)

TSMC logo (Reuters photo)

TAIPEI (Taiwan News) — City officials in Phoenix, Arizona, on Wednesday (Nov. 18) voted unanimously to approve a development deal with Taiwan Semiconductor Manufacturing Company (TSMC) for a planned US$12 billion semiconductor plant.

TSMC in May of this year announced that it intended to build an advanced 5-nanometer fab in Arizona. The company's board of directors earlier this month approved a US$3.5 billion investment as the first contribution to the project.

The Phoenix City Council greenlit the agreement with TSMC with a vote of 9-0, Reuters reported. Before the vote, Mayor Kate Gallego described the deal as “a great success across so many levels of government in helping Arizona become a leader in advanced manufacturing.”

As per the agreement, TSMC will build a new fab and create 1,900 full-time jobs over a five-year period. Construction is expected to begin in 2021, with chip production set to begin by 2024.

To assist in the project, Phoenix will build three miles' worth of streets for US$61 million and spend US$37 million to improve water infrastructure and US$107 million on wastewater improvements. TSMC will enter a formal deal with Phoenix after a site is officially selected, which is slated to happen before the end of the year.

TSMC said that it hopes U.S. federal subsidies will cover the extra cost of manufacturing chipsets in the U.S., reported Reuters. Once the plant is complete, it is expected to use 12-inch wafers and have a production target of 20,000 wafers per month.