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


In November, the Commerce Department finalized a $6.6 billion grant to 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 4-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 of the previously undisclosed production start.


A spokesperson for TSMC, the world's largest contract chipmaker and a major supplier to Apple and Nvidia, 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 production facility by 2030.


Congress created a $52.7 billion semiconductor manufacturing and research subsidy program in 2022. Commerce persuaded all five leading-edge semiconductor firms to locate production facilities in the United States as part of the program.


Raimondo told Reuters earlier that Commerce had to persuade 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 factory, 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.


In April, Commerce said TSMC expects to begin high-volume production in its first U.S. fab by the first half of 2025.


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


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