TSMC receives $6.6 billion subsidy for Arizona factory
The U.S. Department of Commerce has finalized a $6.6 billion government subsidy for Taiwan Semiconductor Manufacturing Co's U.S. subsidiary $TSM. This funding is part of a broader $52.7 billion program authorized in 2022 under the Chips and Science Act.
Manufacturing expansion and state-of-the-art technology
TSMC plans to use this grant to expand its investment in Phoenix, Arizona to a total of $65 billion. In addition to the existing factory, two more will be added, with the second starting to produce the most advanced 2nm chips as early as 2028. TSMC also announced that it will use its state-of-the-art "A16" manufacturing process in Arizona.
"When we started this project, many doubted that TSMC would produce high-end chips in the U.S.," said Commerce Secretary Gina Raimondo. "But in the end, they are bringing the most sophisticated technology to the U.S."
Terms of the subsidy and wider implications
In addition to direct financial support, the agreement with TSMC also includes favorable…
"As part of the agreement, TSMC has committed to refrain from stock buybacks for five years and share excess profits with the US government."
I'd be quite interested in this. Are they going to be held accountable if their margins are too high?;) If the supply chains get screwed up again and they raise prices in the face of high demand, will they kindly share the profits with the government rather than return them to shareholders in the form of stock buybacks? I wonder why they agree to such terms when the US needs them more than the other way around.