U.S. Approves $6.6 Billion Subsidy for TSMC as Trump Era Looms
U.S. Approves $6.6 Billion Subsidy for TSMC as Trump Era Looms.
The U.S. has officially confirmed a $6.6 billion subsidy for Taiwan Semiconductor Manufacturing Company (TSMC) to support semiconductor production at its facility in Phoenix, Arizona. This announcement was made by the U.S. Commerce Department on Friday, marking the completion of a binding contract following a preliminary agreement from April.
This is the first significant award finalized under the $52.7 billion initiative established in 2022. This development comes just weeks before Donald Trump, who has been critical of the program, is set to take office. In April, TSMC committed to increasing its investment from $40 billion to $65 billion and plans to establish a third fabrication plant in Arizona by 2030.
At its second Arizona facility, TSMC will manufacture cutting-edge 2 nanometer technology, with production expected to start in 2028. The company will also implement its latest chip manufacturing technology, known as “A16,” at this site. Commerce Secretary Gina Raimondo expressed confidence in TSMC's capabilities, stating, “When we started this there were a lot of naysayers who said maybe TSMC will do 5 or 6 nanometer in the United States.
Actually, they are doing their most sophisticated chips in the United States.” The award to TSMC also includes up to $5 billion in low-interest government loans. As TSMC meets specific project milestones, it will receive funding, with expectations to disburse at least $1 billion by the end of the year, according to a senior official. Additionally, TSMC has agreed to refrain from stock buybacks for five years, with some exceptions, and will share any excess profits with the U.S. government through an “upside sharing agreement.”
