US Cleared $6.6 Billion TSMC Incentive Package

The US government gave the green light for a record incentive package for Taiwan Semiconductor Manufacturing Company of up to $6.6 billion in direct funding. The package should support the company’s planned investment of $65 billion in three greenfield fabrication facilities in Arizona.

Under the CHIPS and Science Act, the US Department of Commerce will disburse the funds based on TSMC’s local subsidiary’s completion of project milestones. TSMC is on track to receive at least $1 billion before the end of the year as it has met certain requirements. It also will be given $5 billion in loans. The funding was first disclosed in April as part of a preliminary deal. The US has awarded only $6.7 billion of the more than $36 billion it allocated in proposed funding.

The US administration pushed through the TSMC funding, the first major award under the act to be finalized, after Donald Trump was elected. His win raised concerns about the country’s continued commitment to supporting non-US companies in the government’s effort to boost domestic production of high-end chips. President Joe Biden stated the award is the largest foreign direct investment in a greenfield project in the history of the US, with the first of TSMC’s three facilities on track to open early next year.

TSMC chair and CEO C.C. Wei noted the agreement helps them accelerate the development of the most advanced semiconductor manufacturing technology available in the US. The move came merely a week after the DoC ordered TSMC to stop shipping advanced chips to Chinese companies and a month after the chipmaker was forced to stop supplying chips made for a China-based customer after discovering the components ended up on a Huawei processor.