Taiwan’s TSMC, the world’s largest foundry (semiconductor consignment production), is expected to ask the U.S. government for up to $15 billion in semiconductor subsidies, the Wall Street Journal reported on the 19th (local time).
However, it is reported that the U.S. administration is strongly opposed to some provisions that the U.S. administration has offered as a condition for subsidies. Not only TSMC but also South Korean chipmakers such as Samsung Electronics and SK Hynix are concerned about some provisions, the newspaper said.
According to sources familiar with the matter, TSMC expects to receive $7 to $8 billion in tax credits under the U.S. Semiconductor Act (CHIPS Act).
TSMC is planning to build two semiconductor plants in Arizona with a total of $40 billion.
In addition to the tax credit, TSMC is also considering applying for $6 billion to $7 billion in direct subsidies for two Arizona plants, sources said. The combined tax credit and subsidies expected by the company are up to $15 billion.
The variable is that the U.S. government has attached provisions to companies that receive semiconductor subsidies to share excess profits and provide detailed operating information.
In response, TSMC Chairman Liu Dein (Mark Liu) said at an event in Taiwan on the 30th of last month, “Some of these conditions are unacceptable,” adding, “Our goal is to reduce the negative impact, and we will continue to discuss them with the U.S. government.”
The most intense negotiation point between the two sides is a clause that requires the U.S. government to share some of the excess if the semiconductor company’s profits, which receive more than $150 million in subsidies, exceed its forecast, the newspaper said.
TSMC is concerned that the clause will reduce the economic feasibility of the Arizona plant construction project, and believes it is a problem to calculate only the profits of one or two of the global manufacturing facilities, officials familiar with the company’s situation said.
In addition, the U.S. government’s demand for extensive access to TSMC’s books and operations is also an obstacle to applying for subsidies.
TSMC, which has the world’s top technology companies such as Apple as its customers, is in a position to share its business plans and product blueprints, so it has no choice but to pay attention to such confidentiality.
WSJ reported that Samsung Electronics and SK Hynix are also considering whether to apply for U.S. government subsidies for the U.S. plant construction plan, but they are uncomfortable with sharing information with Washington.
In particular, the newspaper pointed out that Korean semiconductor companies are particularly concerned about a clause restricting investment in high-performance semiconductor manufacturing facilities in China.
On the other hand, TSMC, which does not produce state-of-the-art semiconductors at its factories in China, is said to be less problematic with such guardrail provisions, unlike Korean companies.
