TSMC to Win More Than $5 Billion in Grants for US Chip Plant
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Taiwan Semiconductor Manufacturing Co. is set to win more than $5 billion in federal grants to support a chipmaking project in Arizona, according to people familiar with the matter, in what would mark a major milestone in President Joe Biden’s effort to revitalize American semiconductor manufacturing.
The award is not yet finalized, the people said, asking not to be named to discuss confidential conversations. It is also unclear whether TSMC will tap the loans and guarantees also on offer from the 2022 Chips and Science Act.
TSMC and other leading chipmakers are engaged in negotiations with the Commerce Department over a pool of about $28 billion in grants targeted for advanced factories. TSMC, Intel Corp., Micron Technology Inc. and Samsung Electronics Co. are all slated to receive multibillion-dollar awards from that pool, the people said, but the top-line numbers for each continue to fluctuate.
TSMC said in a statement that it “has been making steady progress in productive ongoing discussions with the U.S. government on incentive funding.” The Commerce Department and White House declined to comment.
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In a bid to boost its own award, South Korea’s Samsung has floated additional U.S. investment on top of the $17 billion they plan spend on a new Texas factory, according to other people familiar with those talks, who also asked not to be identified because the discussions are private. Samsung didn’t respond to a request for comment.
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The Chips Act set aside a total of $39 billion in direct grants — plus financing options valued at $75 billion — to persuade chipmakers to build on American soil after decades of production in Asia.
Officials are aiming to make announcements for the major advanced chipmakers by the end of this month and have so far unveiled three awards to firms that produce older-generation semiconductors.
TSMC, the main chipmaker for Apple Inc. and Nvidia Corp., is investing $40 billion to build two fabrication facilities in Arizona — a hot spot for the chip industry and a key political battleground in the 2024 presidential election.
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The site in Phoenix has seen several setbacks, beginning with a July announcement that TSMC would delay production at the first factory until 2025 because of a shortage of skilled workers who could install their most advanced equipment. That set off a monthslong spat with local labor unions, which ended in December with a formal labor accord.
Earlier this year, the company announced a production delay at its second facility of up to two years, and said that the level of technology there will depend on the amount of support they receive from the U.S. government.
Intel, TSMC’s main American rival, is in talks for more than $10 billion in federal incentives spanning grants and loans, according to people familiar with the matter. At least $3.5 billion will come in the form of direct grants, people familiar said earlier.
Micron, meanwhile, has a project in Idaho and has said it will build as many as four facilities in New York. The firm’s award is likely to support the first two of those New York factories, as Commerce Secretary Gina Raimondo prioritizes projects that will begin production by the end of the decade. Micron’s other two factories in the state won’t be operational until 2041, the firm said in a recent federal filing.
Intel and Micron declined separate requests for comment.
