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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.

 

Intel’s $7.86 Billion U.S. Subsidy Deal Imposes Restrictions on Chip Unit Sale

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Intel Corporation has disclosed that its recent $7.86 billion subsidy deal with the U.S. government includes significant restrictions on selling stakes in its chip manufacturing unit, Intel Foundry, if it becomes an independent entity. The subsidy, part of the U.S. Commerce Department’s $39 billion initiative to boost domestic semiconductor production, aims to reduce reliance on foreign manufacturers like Taiwan Semiconductor Manufacturing Co.

Under the terms of the deal, Intel must retain at least 50.1% ownership of Intel Foundry if it is spun off as a privately held subsidiary. If the unit becomes publicly traded, Intel is prohibited from selling more than 35% of the company to a single shareholder without potentially breaching change-in-control provisions.

Intel’s Expansion Plans and Subsidy Compliance

The restrictions are tied to Intel’s ambitious $90 billion investment in domestic semiconductor facilities in states such as Arizona, New Mexico, Ohio, and Oregon. These projects are critical to the company’s strategy to enhance U.S.-based manufacturing of cutting-edge chips.

The U.S. Commerce Department confirmed that similar change-in-control conditions are being negotiated with all recipients of direct grants under the subsidy program. Any significant changes in the ownership structure of Intel Foundry would require prior approval from the Commerce Department.

Intel CEO Pat Gelsinger announced earlier this year plans to spin off the company’s chip manufacturing operations as a separate subsidiary and indicated openness to external investments. However, the subsidy terms could limit Intel’s flexibility in pursuing partnerships or raising additional capital for Intel Foundry.

Industry Context and Future Implications

The $39 billion subsidy initiative is part of a broader effort by the U.S. government to strengthen the domestic semiconductor industry, ensuring resilience against global supply chain disruptions. Other industry giants like Taiwan Semiconductor Manufacturing Co. are also benefiting from this program, signaling a shift toward reshoring critical technology production.

While Intel has not commented further on the subsidy’s restrictions, the provisions underscore the U.S. government’s emphasis on maintaining control and oversight of taxpayer-supported manufacturing initiatives.

As Intel continues its expansion projects, compliance with these restrictions will be pivotal to securing its role as a leader in U.S. chip manufacturing and leveraging the subsidy to achieve its long-term goals.

 

US Finalizes $6.6 Billion Chips Subsidy for TSMC Ahead of Trump’s Presidency

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The U.S. Commerce Department announced on Friday the completion of a $6.6 billion subsidy deal with Taiwan Semiconductor Manufacturing Co. (TSMC) to support semiconductor production in Phoenix, Arizona. The agreement, part of the $52.7 billion Chips and Science Act, marks the program’s first major award since its inception in 2022.

Deal Highlights

  • Expanded Investment: TSMC agreed to increase its total Arizona investment from $40 billion to $65 billion, adding a third fab in Arizona by 2030.
  • Advanced Manufacturing: TSMC will produce 2-nanometer technology chips at its second Arizona fab, set to begin production in 2028. It will also deploy its A16 chip manufacturing technology, one of the world’s most advanced.
  • Financial Structure: In addition to the $6.6 billion subsidy, the agreement includes up to $5 billion in low-cost government loans. Payments will be tied to project milestones, with at least $1 billion expected to be released by year-end 2024.

Commerce Secretary Gina Raimondo highlighted the strategic importance of the deal, emphasizing its role in ensuring the U.S. produces cutting-edge chips domestically. “We had to convince TSMC that they would want to expand,” she said, stressing the economic and national security implications of the agreement.

National Security and Policy Concerns

The announcement comes amid heightened scrutiny of semiconductor technology exports to China. On Saturday, reports emerged that the Commerce Department had instructed TSMC to halt shipments of advanced chips to Chinese customers. Raimondo did not confirm the directive but stated, “Investing in TSMC to expand here is offense—defense is ensuring our most sophisticated technology does not reach adversaries like China.”

The subsidy agreement also requires TSMC to forgo stock buybacks for five years and share excess profits with the U.S. government under an “upside sharing agreement.”

Context and Challenges

The Chips and Science Act was designed to bolster domestic semiconductor production, a critical industry where the U.S. lags behind global leaders. Currently, no leading-edge chips are produced domestically. TSMC CEO C.C. Wei called the deal a key accelerator for advancing U.S. chip manufacturing capabilities.

However, President-elect Donald Trump has criticized the Chips Act, raising questions about the program’s future under his administration. Meanwhile, Commerce has allocated additional funds for other semiconductor projects, including $6.4 billion for Samsung in Texas, $8.5 billion for Intel, and $6.1 billion for Micron Technology. Raimondo aims to finalize these agreements before President Joe Biden leaves office in January.

Geopolitical Implications

The U.S. push for semiconductor independence underscores broader strategic concerns about global supply chains and national security. Raimondo reiterated the importance of balancing offensive and defensive strategies, ensuring subsidies support U.S. technological leadership while preventing advanced technologies from reaching competitors like China.

Outlook

With TSMC’s increased commitment and advanced chip production capabilities, the U.S. aims to regain its footing in the global semiconductor market. However, challenges remain, including Trump’s potential policy changes and the delicate geopolitical balance with China.