The U.S. Commerce Department announced on Tuesday that it has finalized a $406 million government grant to Taiwan’s GlobalWafers to boost silicon wafer production in the United States. This investment is part of the U.S. government’s broader efforts to strengthen the domestic semiconductor supply chain.
Expansion of U.S. Production
The grant will fund projects in Texas and Missouri, aimed at establishing the first high-volume U.S. production of 300-mm silicon wafers, a critical component for advanced semiconductors. Additionally, the funds will support the expansion of silicon-on-insulator wafers production. These wafers are essential for the manufacture of cutting-edge chips, aligning with the Biden administration’s initiative to enhance the U.S. semiconductor industry.
GlobalWafers plans to invest nearly $4 billion to build new wafer manufacturing facilities in both states. This expansion is expected to create 1,700 construction jobs and 880 manufacturing jobs. The company’s move comes at a time when the U.S. is looking to reduce its dependence on foreign-made chips and strengthen its domestic production capabilities.
Strategic Localization Amid Global Supply Chain Challenges
CEO Doris Hsu of GlobalWafers expressed the strategic importance of localizing production, especially given the current global semiconductor supply chain challenges. She highlighted that local supply in high-demand regions, like the U.S., will be prioritized, as it is more likely to be supported by local customers.
Hsu also acknowledged the potential uncertainties regarding the U.S. CHIPS Act with the incoming Trump administration, which will take office next month. However, she expressed confidence in the continuation of the initiative, noting that the CHIPS Act had its origins during Trump’s first term. While the company is legally protected by contracts, Hsu pointed out that tariffs and potential new policies could still affect the company’s operations and supply chain.
Global Wafer Production and U.S. Investment
GlobalWafers’ decision to invest in the U.S. aligns with its broader strategy to address the growing demand for semiconductors. In 2022, the company announced plans to build a $5 billion plant in Texas to produce 300-mm silicon wafers, a shift from its original plan to invest in Germany.
Currently, five major companies, including GlobalWafers, control over 80% of the global market for 300-mm silicon wafers, with the majority of production still concentrated in East Asia. The company is expanding its presence in the U.S. with a new plant in Sherman, Texas, to manufacture wafers for advanced, mature-node, and memory chips, as well as a new facility in St. Peters, Missouri, to produce wafers for defense and aerospace applications.
Urgency to Finalize CHIPS Act Awards
The U.S. Commerce Department is working swiftly to finalize grants under the CHIPS and Science Act, a semiconductor manufacturing and research subsidy program that was approved in 2022 with a budget of $52.7 billion. The department aims to complete these awards before Trump’s inauguration on January 20.