Semiconductor manufacturers TSMC and GlobalFoundries reach agreement with Department of Commerce on CHIPS subsidy assistance
It has been revealed that TSMC, the industry's number one semiconductor manufacturer, and GlobalFoundries, the industry's number three, have reached a 'binding agreement' in negotiations with the Department of Commerce regarding subsidies based on the CHIPS Act, which aims to support and promote the semiconductor industry in the United States. It is unclear when the formal contract will be made, but since Donald Trump, who is certain to win the 2024 US presidential election, has taken a skeptical stance on the CHIPS Act, it is expected that the formal contract will be reached during President Biden's term.
TSMC (TSM), GlobalFoundries (GFS) Finish Talks Over Billions in Chips Awards - Bloomberg
Chipmakers race to get CHIPS Act dollars before White House changeover — TSMC and GlobalFoundries finalize applications, facilitating payouts | Tom's Hardware
TSMC, GlobalFoundries reportedly complete CHIPS Act funding negotiations - SiliconANGLE
https://siliconangle.com/2024/11/07/tsmc-globalfoundries-reportedly-complete-chips-act-funding-negotiations/
TSMC and GlobalFoundries finalize CHIPS Act funding agreements - DCD
https://www.datacenterdynamics.com/en/news/tsmc-and-globalfoundries-finalize-chips-act-funding-agreements/
The CHIPS Act is a law enacted in August 2022 with the aim of promoting the semiconductor manufacturing industry in the United States, and is also known as the CHIPS Plus Act together with the Science Act.
GlobalFoundries has received $1.5 billion in grant funding and $1.6 billion in loans to build a new factory in Malta, New York, and to modernize its Essex Junction, Vermont, facility.
TSMC has received $6.6 billion in grant funding and a $5 billion loan to build a third factory in Phoenix, Arizona.
These were all tentative agreements, but Donald Trump, who was skeptical of the CHIPS Act, won the US presidential election held on November 5, 2024 local time. If the Trump administration comes to power in January 2025, there is a possibility that the CHIPS Act will be reviewed or the policy will be changed, so it is believed that the talks have progressed during the Biden administration.
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The amount of the final agreement has not been disclosed, but Bloomberg reported, citing sources, that the amount is roughly the same as the tentative agreement.
More than 20 companies have applied for funding under the CHIPS Act, and contracts are being delayed as a thorough evaluation process is being carried out. According to news site Tom's Hardware, Intel is set to receive $8.5 billion in grants and $11 billion in loans, but as of the end of October 2024, the grants have not yet been paid.
Meanwhile, the news site CNBC has expressed the view that, although Trump has expressed skepticism about the CHIP Act in speeches and other occasions, he actually supports it. This opinion was expressed by Adam Posen of the Peterson Institute for International Economics, who cited the example of a similar policy in which the Biden administration, which has changed its strategy, has left in place the tariffs on China that Trump imposed when he was president. Posen expressed the view that Trump will likely move to expand tariffs rather than expand industrial policy.
Trump likely to uphold the CHIPS Act despite his campaign rhetoric, policy experts say
https://www.cnbc.com/2024/11/07/trump-likely-to-uphold-chips-act-despite-his-campaign-rhetoric-experts-say.html
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