The Taiwan Semiconductor Manufacturing Company (TSMC) logo is seen during the opening ceremony of the TSMC Global RnD Center in Hsinchu on July 28, 2023. (Photo by Amber Wang/AFP)
Vuong Ho Amber | Afp | Getty Images
The U.S. Department of Commerce said Friday that it has finalized a $6.6 billion government subsidy for Taiwan Semiconductor Manufacturing Co.’s U.S. semiconductor manufacturing unit in the United States. Phoenix, Arizona.
The binding contract – which follows a preliminary agreement announced in April – is the first major award to be completed under the $52.7 billion program created in 2022.
It comes just weeks before President-elect Donald Trump, who has criticized the program, takes office.
In April, TSMC agreed to expand its planned investment from $25 billion to $65 billion and add a third factory in Arizona by 2030.
The Taiwanese company will produce the world’s most advanced 2-nanometer technology at its second factory in Arizona, scheduled to begin production in 2028. TSMC also agreed to use the most advanced chip manufacturing technology Mine is called “A16” in Arizona.
“When we started this, there were a lot of naysayers saying maybe TSMC would produce the 5- or 6-nanometer process in the United States,” Commerce Secretary Gina Raimondo said in an interview. “They’re actually making the most complex chips in America.”
The TSMC award also includes low-cost government loans of up to $5 billion.
TSMC
Under the agreement, TSMC will receive cash when project milestones are met. A senior official told reporters that the Commerce Department is expected to disburse at least $1 billion to TSMC by the end of the year.
TSMC has agreed to forgo stock buybacks for five years – with some exceptions – and share any excess profits with the US government under a “reverse sharing agreement”.
TSMC CEO CC Wei said in a statement that the deal “helps us accelerate the development of the most advanced semiconductor manufacturing technology available in the US.”
Congress in 2022 passed the Science and Chips Act to boost domestic semiconductor output, which Raimondo called necessary to attract TSMC and other chip investments. There are currently no advanced chips manufactured in the United States.
“It doesn’t happen on its own… We have to convince TSMC that they want to expand,” Raimondo said, adding officials must also convince American companies to buy American-made chips. “The market does not price national security.”
Commerce has allocated $36 billion for chip projects, including $6.4 billion for SAMSUNG in Texas, $8.5 billion for Intel and 6.1 billion USD for Micron Technology. The Commerce Department is working to finalize those agreements before Biden leaves office on January 20.
Reuters reported on Saturday that the Commerce Department ordered TSMC to pause shipments of advanced chips to Chinese customers.
Raimondo did not confirm that the ministry had issued a directive to TSMC but said the United States needed to play offense and defense with China.
“Investing in TSMC to expand here is a violation — the defense is ensuring that neither TSMC nor any other company sells our most sophisticated technology to China and violates it,” Raimondo said. our export controls.”
“We take national security very seriously and look at any potential issues, whether it is with the companies we subsidize or not,” she added.
