The funds are intended to support the construction of a factory complex in Phoenix and to expand its capacity as part of a strategic effort to revitalize the U.S. semiconductor industry.

Funding is based on the CHIPS Act, which was passed in the U.S. in 2022 and allocates approximately $280 billion to support domestic chip research and manufacturing. In addition to national security concerns stemming from the concentration of semiconductor manufacturing in Asia, the U.S. aims to diversify semiconductor production and attract more electronics manufacturing to the Western Hemisphere. The US share of chip production has fallen from 37% in 1990 to 12% in 2020, but these initiatives aim to increase the US share to around 20% of the global chip market by 2030.

Grants under the CHIPS Act have already been awarded to GlobalFoundries and Intel, and other major grants are expected, including to Micron, a computer memory maker that is building a chip factory in New York, and Samsung Electronics, which is expanding its operations at a factory complex in Texas. Taiwan Semiconductor Manufacturing Corporation (TSMC) plans to invest a total of over US$65 billion, with one of the factories producing state-of-the-art 2nanometer chips. The company said in a statement that this is the largest direct investment to date by a foreign entity in a greenfield project in the US. TSMC's Arizona plant will supply chips to its US clientele, which includes major companies such as AMD, Apple, Nvidia and Qualcomm. The company expects the three manufacturing units to create approximately 6,000 direct jobs.