TSMC agreed to expand its planned investment by $25 billion to $65 billion and to add a third Arizona fab by 2030, Commerce said in announcing the preliminary award. The Taiwanese company will produce the world's most advanced 2 nanometer technology at its second Arizona fab expected to begin production in 2028, the department said.

"These are the chips that underpin all artificial intelligence, and they are the chips that are necessary components for the technologies that we need to underpin our economy, but frankly, a 21st century military and national security apparatus," Commerce Secretary Gina Raimondo said in a statement.

TSMC, the world's largest contract chipmaker and a major supplier to Apple (AAPL.O)

, opens new tab and Nvidia (NVDA.O), opens new tab, had previously announced plans to invest $40 billion in Arizona. TSMC expects to begin high-volume production in its first U.S. fab there by the first half of 2025, Commerce said.