Signed at the end of 2022, the “CHIP Act” in the United States was presented to voters as one of the main achievements of the outgoing administration of President Biden. Since the spring of this year, the US Department of Commerce has been actively distributing subsidies for the construction of chip factories, but these were only preliminary agreements. The final ones will be reached soon, TSMC and GlobalFoundries may be among the first recipients of government funds.
Image source: GlobalFoundries
The completion of negotiations between American officials and the management of TSMC and GlobalFoundries was reported this week by Bloomberg. The current US presidential administration is in a hurry to complete the job before its term ends. It is not specified when the final versions of the agreements between the US government and these companies will be signed. But it is known that the amounts provided to companies will be comparable to those mentioned in the preliminary agreements.
Back in February, GlobalFoundries was promised $1.5 billion in non-repayable subsidies for the construction of a plant in New York State and the modernization of existing ones, as well as $1.6 billion in soft loans. Taiwan’s TSMC in April agreed to provide $6.6 billion in non-repayable subsidies and $5 billion in soft loans that will be used to build three chip manufacturing plants in Arizona, the first of which has already begun producing trial products.
In total, let us remind you that the so-called “Chip Law” allows for the allocation of $39 billion in non-repayable subsidies and a decent amount in the form of soft loans directly for the construction of factories in the United States. Program participants can also receive a 25 percent tax deduction on their capital expenditures. More than 20 companies, including foreign ones, are applicants for government support in this area. About $3 billion in subsidies have not yet been distributed, but key projects for the development of the US national semiconductor industry have already received the attention of the American authorities. It is very likely that many of the agreements with applicants will be signed by Donald Trump, who is due to take office as US President in January next year. Intel CEO Patrick Gelsinger last week lamented the slowness of US authorities in coordinating subsidies, his company being the largest recipient of the Commerce Department’s bailout.