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U.S. Finalizes $406 Million Chips Subsidy for Taiwan’s GlobalWafers

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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.

 

China, Trump Signal Cautious Optimism for Renewed US-China Cooperation Amid Tough Rhetoric

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China’s top diplomat, Foreign Minister Wang Yi, expressed hope on Tuesday that the incoming Trump administration would collaborate with Beijing “in a mutually beneficial manner” despite ongoing tensions. Wang’s comments came hours after Donald Trump remarked that the COVID-19 pandemic had strained his relationship with Chinese President Xi Jinping, whom he once considered a “friend.”

“We hope the new U.S. administration will make the right choice and work with China to remove disruptions and overcome obstacles,” Wang stated during a forum in Beijing, according to his ministry’s statement.

Trump, addressing reporters at his Mar-a-Lago resort, reflected on his past relations with Xi, acknowledging the pandemic as a breaking point. “We had a very good relationship until COVID,” Trump said. “COVID didn’t end the relationship, but it was a bridge too far for me.” Trump avoided confirming whether Xi would attend his inauguration but emphasized the importance of U.S.-China ties: “China and the United States can together solve all of the problems of the world.”

Trump’s Second Term Agenda and Beijing’s Strategy

Trump has signaled a more confrontational stance toward China as he prepares for his second term. His campaign promises include imposing a 10% tariff on Chinese goods and additional levies exceeding 60% to pressure China on issues like stopping fentanyl exports to the U.S. Trump has also pledged to revoke China’s most-favored-nation trade status—a move that could reshape bilateral trade dynamics.

In response, analysts suggest China is preparing to amass bargaining chips to engage with Trump’s administration on contentious issues such as trade, technology, and investment. Beijing has shown readiness to push back, with Wang Yi emphasizing China’s firm stance: “We firmly oppose the illegal and unreasonable suppression of China by the U.S., particularly on matters like Taiwan.”

Sanctions and Hard-Line Appointments

The diplomatic environment remains volatile as Trump’s choice of China hawks for key positions signals an aggressive approach. Republican Senator Marco Rubio, Trump’s nominee for Secretary of State, remains under Chinese sanctions imposed in 2020. Rubio’s prior criticism of Beijing raises questions about how his role would affect bilateral engagement.

China’s move to quietly remove a January 2021 statement sanctioning 28 Trump administration officials from its foreign ministry website has further fueled speculation. When asked about this development, Chinese Foreign Ministry spokesperson Lin Jian declined to comment, stating he had “no information to offer.”

Mutual Posturing, Cautious Optimism

Despite the confrontational rhetoric, both sides have hinted at opportunities for collaboration. Trump’s remarks acknowledged the global importance of U.S.-China cooperation, while China continues to position itself for negotiations that balance engagement with resistance to U.S. policies it deems provocative.

As Trump prepares for a second term, Beijing appears both prepared to push back against hard-line policies and cautiously optimistic about finding common ground to stabilize bilateral relations.

 

Typhoon Kong-rey Hits Taiwan, Causes Widespread Damage and Disruption

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Typhoon Kong-rey, the most significant typhoon to strike Taiwan in nearly 30 years, made landfall on the island’s eastern coast on Thursday, bringing with it devastating winds and heavy rainfall. The storm hit at approximately 13:40 local time (04:40 GMT), prompting widespread school and workplace closures, while residents rushed to supermarkets, which quickly ran out of essential supplies.

Typhoon Impact

Before making landfall, Typhoon Kong-rey exhibited winds exceeding 200 km/h near its center, categorizing it as a Category 4 hurricane. The severe weather conditions led to the suspension of hundreds of flights and ferry services, as well as the closure of Taiwan’s stock exchange. By Thursday afternoon, authorities reported that over 70 people had been injured, and at least one fatality was confirmed: a 56-year-old woman who was killed when a falling tree struck her vehicle.

In addition to injuries, the typhoon caused power outages for approximately 500,000 households, according to Taiwan Power Company. The late arrival of such a significant storm is unusual, as Taiwan’s typhoon season typically spans from July to September. In fact, two major storms have impacted the island in October this year, the other being Super Typhoon Krathon, which resulted in four deaths and more than 700 injuries.

Historical Context and Concerns

Residents expressed their disbelief at the unusual timing of the storm. “I’m 70 years old,” a man in Hualien told a TV reporter, “and I have never seen a typhoon hit this late in the year.” This anomaly is thought to be linked to near-record global sea surface temperatures reported since July, which provide additional heat energy to fuel storm systems.

Beyond the high winds, Typhoon Kong-rey poses significant risks due to the moisture it carries, potentially leading to heavy rain, flooding, and landslides. Forecasters predict that the eastern part of Taiwan could experience up to 1,200 mm of rainfall between October 29 and November 1.

Preparedness and Response

In anticipation of the storm’s impact, Taiwan’s defense ministry placed 36,000 soldiers on standby for potential rescue efforts. Authorities have already evacuated around 8,600 people from high-risk areas. Taiwanese President Lai Ching-te emphasized the importance of safety, urging residents to remain indoors during the storm.

As Typhoon Kong-rey progresses, it is expected to gradually weaken after landfall and should leave the island by Friday, according to the island’s weather agency.