U.S. locks in $6.6 billion grant to Taiwanese chipmaker
The Biden administration has finalized a $6.6 billion grant for the Arizona subsidiary of Taiwan Semiconductor Manufacturing Co.
The award will support the construction of three chip factories in Phoenix, the first of which is scheduled to open early next year. The Commerce Department said the grant will spur $65 billion of private investment and create tens of thousands of jobs by the end of the decade. TSMC is also getting $5 billion in low-cost government loans, the Commerce Department said.
In a press release, Commerce Secretary Gina Raimondo called the investment “a turning point for American innovation and manufacturing that will strengthen our economic and national security.”
TSMC is the world’s largest and most advanced contract manufacturer of chips, and U.S. officials view it as an important participant in the U.S. domestic chips program of the 2022 Chips and Science Act. TSMC’s customer list includes leading U.S. tech companies such as Apple and Nvidia, which design their own chips but contract TSMC to fabricate them.
Under terms of the grant, which was first announced in April, TSMC will receive cash as it meets project milestones. A Commerce Department official, speaking on the condition of anonymity to discuss funding details, said the department expects at least a billion dollars to be released to TSMC this year.
The Chips and Science Act allocated more than $36 billion for semiconductor manufacturing and other critical infrastructure projects. But the program faces an uncertain future under the new administration. President-elect Donald Trump has criticized the chip subsidies and argued that tariffs could have persuaded the company to build chips without taxpayer funds.
Management of these new factories is expected to be a complex economic issue for Trump’s presidency. Republicans are traditionally averse to federal subsidies, but they agree with Democrats on the need to attract and retain valuable factories on U.S. soil.
U.S. companies such as Intel have already spent billions of dollars under the chips program. Former Trump administration officials say he probably will attempt to use tariffs to help shield fledgling chip factories, which could raise U.S. prices for some products.
TSMC does significant business with Chinese companies and has recently been under pressure to pare down those sales to comply with Washington’s measures to restrict China’s access to advanced technologies. U.S. lawmakers from both major parties have expressed concern in recent weeks over reports that at least one Chinese customer of TSMC helped Beijing circumvent U.S. export controls.