TSMC (NYSE:TSM) has been awarded a $6.6 billion subsidy for advanced semiconductor production in Phoenix, Arizona by the U.S. Commerce Department. In addition, the U.S. Commerce Department awarded TSMC up to $5 billion in low-cost government loans.
This funding is part of the U.S. government’s CHIPS Act, which provides government support for the construction of new U.S. chip-making capacities by chipmakers.
Following this funding, TSMC has agreed to expand its investment to $65 billion and will add a third fab in Arizona by 2030. Furthermore, TSMC will produce 2-nanometer technology chips at the second Arizona fab with production likely to begin in 2028.
TSMC is a major chip supplier to Apple (NASDAQ:AAPL) and expects to begin production in the fab in Arizona by the first half of next year.
Furthermore, TSMC’s $65 billion investment is Arizona’s largest foreign direct investment and the largest foreign direct investment in a greenfield project in U.S. history.
Is TSM a Buy, Sell, or Hold?
Analysts remain bullish about TSM stock, with a Strong Buy consensus rating based on a unanimous eight Buys. Year-to-date, TSM stock has surged by more than 30%, and the average TSM price target of $154.14 implies an upside potential of 9% at current levels.
