TSMC and GlobalFoundries have reached a binding agreement in the subsidy negotiations for the US semiconductor support measure "CHIPS Act", but the future policy is unclear due to the influence of President-elect Trump.
TSMC (TSM), GlobalFoundries (GFS) Finish Talks Over Billions in Chips Awards – Bloomberg
🟦 U.S. SEMICONDUCTOR SUPPORT MEASURE “CHIPS ACT”: TSMC AND GLOBALFOUNDRIES ACHIEVE IMPORTANT AGREEMENT
Just before the 2024 U.S. presidential election, TSMC and GlobalFoundries signed a binding agreement with the Department of Commerce to provide subsidies under the CHIPS Act to support the semiconductor industry in the United States. Under the agreement, TSMC received $6.6 billion in grants and $5 billion in loans to help set up a state-of-the-art 2nm chip factory in Arizona, while GlobalFoundries also secured $1.5 billion in grants for a new plant in New York and a factory expansion in Vermont. The U.S. government aims to strengthen domestic semiconductor production and reduce dependence on countries such as South Korea and Taiwan, and this agreement is expected to lead to a significant increase in semiconductor manufacturing in the United States.
🟦 From the Biden Administration to the Trump Administration: The Risk of Semiconductor Policy Fluctuations
The CHIPS Act was enacted in 2022 with the aim of promoting the semiconductor industry in the United States, but Mr. Trump, who was elected as the next president, has taken a skeptical stance on this policy. With Trump’s inauguration, there are concerns that grant support under the CHIPS Act will likely be reviewed, which will affect the plans of TSMC and GlobalFoundries. Some believe that Trump may focus on tightening tariff policy rather than promoting industrial policy. For this reason, TSMC and GlobalFoundries, which want to increase semiconductor manufacturing in the United States, have an urgent need to reach a formal contract during the Biden administration.
🟦 Summary
The agreement between TSMC and GlobalFoundries to support the CHIPS Act, a measure to support the U.S. semiconductor industry, is an important step toward strengthening the manufacturing base in the United States. However, it is unclear how the policies of Mr. Trump, who was elected as the next president, will change future subsidies and industrial support measures, and uncertainties remain for the semiconductor industry in the United States.
It seems that the risk of policy changes due to the change of government has had a significant impact on the background of the last-minute progress in the subsidy negotiations. In fact, it was the previous Trump administration that was active in attracting TSMC, and it may be confident that TSMC can be attracted without subsidies.
