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Biden sidelines Samsung, TSMC gets $6.6 billion CHIPS subsidy in the US
Biden administration approved a $6.6 billion CHIPS Act subsidy to TSMC. The move comes right before President-elect Donald Trump’s 2nd term. Samsung and SK Hynix are also eligible for incentives but disbursal is awaited.
The outgoing gov led by Joe Biden has officially confirmed a $6.6 billion subsidy under the CHIPS and Science Act for the TSMC semiconductor plant in Arizona, US.
On November 15, the White House announced, “The Department of Commerce has provided up to $6.6 billion in direct funding to TSMC’s subsidiary, TSMC Arizona.”
“Today’s final agreement with TSMC – the world’s leading manufacturer of advanced semiconductors – will spur $65 billion dollars of private investment to build three state-of-the-art facilities in Arizona and create tens of thousands of jobs by the end of the decade. This is the largest foreign direct investment in a greenfield project in the history of the United States.
The first of TSMC’s three facilities is on track to fully open early next year, which means that for the first time in decades an American manufacturing plant will be producing the leading-edge chips used in our most advanced technologies – from our smartphones, to autonomous vehicles, to the data centers powering artificial intelligence.” – U.S. President Joe Biden
After Trump hinted at repealing the CHIPS Act, concerns were raised about whether the subsidy promised by the Biden administration would actually be executed.
Intel, Samsung and SK still waiting
Intel, Samsung, and SK Hynix have also signed preliminary agreements with the US Gov. However, TSMC has a sharp edge in terms of becoming the initial beneficiary.
Samsung will invest $44 billion and receive a subsidy of $6.4 billion, while SK Hynix will invest $3.87 billion and receive a subsidy of $450 million.
Following the TSMC announcement, it is expected that subsidies for other semiconductor companies such as Intel, Samsung, and SK Hynix will also be confirmed.
Low-interest loans for TSMC
The US Department of Commerce also stated that it would provide TSMC Arizona with low-interest loans of up to $5 billion, following the disbursal of incentives.
TSMC plans to invest $65 billion to build three semiconductor plants in Arizona. The second plant, scheduled to be operational in 2028, will use 2nm technology.