Semiconductor giant
TSMC
is reportedly close to securing a major financial win from the US government. According to a report in Bloomberg, the company is in line for over $5 billion in federal grants to support its chip manufacturing facility being built in Arizona. The Bloomberg report says that this would be a significant step forward for President
Biden’s plan
to revitalize American chip production.
The
Chips Act
set aside a total of $39 billion in direct grants — plus financing options valued at $75 billion with the aim to persuade chipmakers to build in America after decades of production in Asia.
The deal isn’t finalized yet, and it’s unclear if TSMC will utilize additional support offered by the 2022 Chips and Science Act, such as loans and guarantees. Talks are reportedly ongoing between TSMC and other leading chipmakers with the Commerce Department regarding a $28 billion pool designated for advanced chip factories. While TSMC, Intel, Micron, and Samsung are all expected to receive significant grants, the exact amounts are still under negotiation.
Competition Heats Up for Chip Funding
South Korea’s Samsung is reportedly trying to sweeten the pot by proposing additional US investments beyond their planned $17 billion factory in Texas. The government aims to announce awards for major chipmakers by the end of the month. So far, agreements have been reached with three companies producing older chip technology.
TSMC’s Arizona Project Faces Hurdles
TSMC, a key supplier for Apple and Nvidia, is investing a hefty $40 billion to build two factories in Arizona, a state crucial to both the chip industry and the upcoming 2024 presidential election. However, the project has encountered challenges. A worker shortage delayed the first factory’s production to 2025, leading to tension with local unions. Earlier this year, TSMC announced a further delay for the second facility, with its technological capabilities hinging on US government support.
US Chipmakers Vie for Funding
TSMC’s main competitor, Intel, is reportedly negotiating for over $10 billion in combined grants and loans. Micron, with projects in Idaho and New York, is likely to receive support for its initial New York factories, as the government prioritizes projects with production starting before the end of the decade.