Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and GlobalFoundries Inc have finished negotiating binding agreements for billions of dollars in grants and loans to support US factories, sources familiar with the matter said.
The deals, announced as tentative agreements earlier this year, come as US President Joe Biden’s administration races to get CHIPS and Science Act money out the door before the end of its term in January.
It is unclear when the agreements would officially be signed and the incentives unveiled, said the sources, who asked not to be identified because the conversations are private.
Photo: Chiang Ying-ying, AP
The award amounts are roughly in line with the preliminary agreements, the sources said.
TSMC’s package announced in April includes US$6.6 billion in grants and as much as US$5 billion in loans to support the construction of three semiconductor factories in Phoenix. GlobalFoundries’ agreement from February is for US$1.5 billion in grants and as much as US$1.6 billion in loans to support a new plant in New York state, as well as expansions of existing facilities there and in Vermont.
TSMC, GlobalFoundries and the US Department of Commerce declined to comment.
The CHIPS Act set aside US$39 billion in grants — plus billions more in loans and 25 percent tax credits — to revitalize US semiconductor manufacturing after decades of production shifting to Asia. It has generated 10 times that amount in promised private investment, including factories for advanced chips, older-generation semiconductors and supply chain components.
More than 20 companies are in line to win US government funding, and they have spent months undergoing a due diligence process after negotiating preliminary accords. There is also almost US$3 billion left to divvy up into preliminary agreements.
That means it is extremely likely that some of the funding would be finalized under the leadership of Donald Trump, who would take the White House in January.
Once contracts are signed, money would be disbursed in tranches based on project-specific milestones.
Industry officials are anxious to get things squared away as quickly as possible, to allow money to start flowing to projects that have hit those benchmarks as well as due to recent comments from Trump disparaging the program as “so bad.”
It is not yet clear what Republican control would bring. US House of Representatives Speaker Mike Johnson on Friday last week said that he wants to “streamline” the law, after floating — and then immediately walking back — the possibility of a wholesale repeal.
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