As the election of Donald Trump to the Presidency takes hold, TSMC and GlobalFoundries have lined up to get their CHIPS money.
And good thing too because Republicans have actually hinted at repealing the CHIPS Act. No CHIPS Act, no continued funding / benefits for domestic semiconductor manufacturing.
TSMC and GlobalFoundries have finalized CHIPS and Science Act funding agreements with the U.S. government to support their fab projects in America, reports Bloomberg. These will be the first two major foundries to receive actual money under the CHIPS and Science Act, which marks a significant step forward both for the bill and the companies. This is occurring just months before President-elect Donald Trump’s second administration begins, which creates uncertainty for chipmakers that were negotiating with President Joe Biden’s administration.
The finalized agreements offer GlobalFoundries and TSMC billions of dollars in grants and loans to build and expand manufacturing facilities in the U.S. TSMC’s agreement includes $6.6 billion in grants and up to $5 billion in loans to develop Fab 21 in Phoenix, Arizona. GlobalFoundries will receive $1.5 billion in grants and up to $1.6 billion in loans to construct a new semiconductor production facility in New York and expand operations in New York and Vermont. The company is also set to get $600 million from the state of New York.
You know, it’s actually pretty sad this is the point we’re at as a nation… we have to artificially fund various semiconductor companies operations inside the United States because for god knows what reason multiple administrations allowed chip manufacturing to move offshore. The strategic nature of semiconductor manufacturing seems to have only partially been realized and not safeguarded.
Anyway, TSMC and GlobalFoundries seem to want to get their money into their bank accounts before a new administration and a new Congress take hold of the government. Why take the risk of dealing with a new administration that may not support you over the long term. From TSMCs and GlobalFoundries perspective they need that cash now to pay for what they’re doing… just like Intel.
If the new Presidential Administration does not appreciate what the CHIPS Act actually does Intel is the one who will be the most screwed. But GlobalFoundries and TSMC both have investments in the United States and need help to make them economical. Cutting the CHIPS Act could seriously harm not just domestic semiconductor manufacturing but also the companies responsible. I have a weird suspicion that the new administration and new congress do not actually appreciate what the CHIPS Act does as much as one would hope. They may very well be gearing up to “repeal and replace” it with something worse for the United States.
At the end of the day, it is absolutely vital that the United States build up a semiconductor manufacturing ecosystem inside the country. We cannot continue to rely on Asian suppliers and manufacturers for all of our chips and electronics. All of them are at risk thanks to the extreme nature of China’s government. The days of relying on Taiwan for 40% of the world’s fab capacity are limited.