Apple Chipmaker TSMC to Receive $6.6 Billion Grant to Step Up Production in the U.S.

[rp2011]

Hahaha. What happened to free market?

Let's remember that Intel wanted all the welfare for itself. They will still receive a nice chunk of welfare for taking a virtual monopoly and blowing it, but I am glad to see TSMC being encouraged to participate in US production instead of just failed companies like Intel.

 

[Populus]

The timing of this makes me smile.

Do you think it is because of the recent earthquake? Or because of the potential invasion of Taiwan by China? (Or both)

 

[gigapocket1]

Until all plants are operational…. And actually pumping out chips. This means nothing lol.

 

[Nebrie]

The Taiwanese government effectively created TSMC and owns a big chunk of the shares. Anyone thinking they're going to move all their factories to America so that America can let China take over Taiwan is delusional. The only reason Taiwan is doing this token fab is to curry geopolitical favor with US politicians. They're not going to do much more, especially when an American semiconductor engineer costs literally 10x as much as one in Taiwan.

 

[GrayFlannel]

Do you think it is because of the recent earthquake? Or because of the potential invasion of Taiwan by China? (Or both)

There’s other options as covered by Financial News’ March 20 article.

 

[aknabi]

I think this is great news. The more independent is the US from China, the better. The EU should take a lesson from this!

The EU getting its act together even to take a lesson? Yeah that's not the EU way... wait until the crisis is exploding, then squabble about what to do about it...

But indeed given TSMC is an offshoot of Philips the Netherlands should get TSMC to "come home" and open something here (though I'm guessing if a fab happened it'd be in Eastern Europe... but not in "arms reach" of Putin...)

 

[MasterControlProgram]

The Taiwanese government effectively created TSMC and owns a big chunk of the shares. Anyone thinking they're going to move all their factories to America so that America can let China take over Taiwan is delusional. The only reason Taiwan is doing this token fab is to curry geopolitical favor with US politicians. They're not going to do much more, especially when an American semiconductor engineer costs literally 10x as much as one in Taiwan.

You don't think all the TSMC executives and top engineers have been guaranteed a safe haven when China invades in return for them relocating all their manufacturing to the US? It would seem unwise for the US to allow the best fabs in the world to be taken over by the CCP. I'd imagine once the invasion starts the factories will be destroyed to stop the Chinese getting their hands on them.

 

[LedRush]

Hahaha. What happened to free market?

China.

 

[Timo_Existencia]

The EU isn't against exporting or self sufficiency though. The EU is not playing games either. They just have strict rules on competition, monopolies & particularly privacy/personal data that US tech companies can get away with abusing in most parts of the world, but not in the EU.

The EU is using legislation and protectionism to try to paper over their lack of innovation and tech. They think punishing outside competition will even the scales. It won't. Because it will do nothing to spur development of tech within their own borders. The EU is a tech ghetto, and it knows it.

The EU could have chosen to subsidize and support true development of tech and alternatives to global players. But again, it simply chose to try to harm the competition.

 

[Attirex]

Half of money disappears because of grift and corruption in 3...2.....

(see also: many Arizona rednecks suddenly driving RILLY nice diesel pickup trucks)

 

[Analog Kid]

The subsidies are from the 2022 Chips Act. Intel is receiving $8.5bn in grants and up to $11bn in loans.

I expect TSMC will make use of this money more quickly and more effectively. Intel's foundry business is hemorrhaging money and they keep delaying construction starts.

 

[itti]

I am curious about the fate of these government-funded factories. Theoretically, they are inefficient and shouldn’t be able to complete in the long term. I think this is just a pricey backup in case china takes over Taiwan and cuts our supply chain. We banned their access to TSMC, and I am pretty sure they were not happy about that.

 

[Rigby]

I think this is great news. The more independent is the US from China, the better. The EU should take a lesson from this!

The EU has its own version of the Chips Act. Germany is also providing additional subsidies for TSMC and Intel fabs:

Billions in German subsidies secured for Intel and TSMC Fabs

German authorities agree on fundings of semiconductor fabs.

www.tomshardware.com

 

[Rigby]

Let's remember that Intel wanted all the welfare for itself.

I'm sure you have a source for that? AFAIK they have never advocated this.

What we should also remember is that TSMC has received tens of billions of "welfare" from the Taiwanese government over the decades, a luxury that American manufacturers never had before the Chips Act.

 

[blaureiter]

The United States Commerce Department today announced a significant financial commitment to Apple chip supplier TSMC to make more chips in the U.S. (via Bloomberg).

The White House shared a statement explaining that the U.S. Commerce Department will allocate a $6.6 billion subsidy to TSMC for the advancement of semiconductor production in Phoenix, Arizona. TSMC will also receive $5 billion in loans and be eligible to claim an investment tax credit of up to 25% of capital expenditures. The move is part of a larger initiative under the CHIPS and Science Act, which aims to rejuvenate the United States' semiconductor manufacturing capabilities.

TSMC has already committed to an escalated investment of $25 billion, elevating its total investment to $65 billion. This is the largest foreign direct investment in a completely new project in U.S. history.

The chipmaker also announced plans to construct a third fabrication plant in Arizona by 2030. The first TSMC plant in Arizona will start producing 4nm chips next year. The second plant, which was originally designed to make 3nm chips, will also make 2nm ones by 2028. The third plant will produce 2nm chips with capacity to make even more advanced semiconductors in the future.

Apple's most advanced chips are currently made in Taiwan using TSMC's 3nm process, so the ability to make these chips and even more powerful ones in the future in the United States could represent a significant future shift in the company's supply chain.

Article Link: Apple Chipmaker TSMC to Receive $6.6 Billion Grant to Step Up Production in the U.S.

It is curious that so many factories that require lots of water and stable temperatures plan to fabricate semiconductors in Arizona which has diminishing water supplies and increasing temperatures. I am sure that are tax advantages to any of these southern states but the long term viability is an open question.

 

[Steve121178]

The EU is using legislation and protectionism to try to paper over their lack of innovation and tech. They think punishing outside competition will even the scales. It won't. Because it will do nothing to spur development of tech within their own borders. The EU is a tech ghetto, and it knows it.

The EU could have chosen to subsidize and support true development of tech and alternatives to global players. But again, it simply chose to try to harm the competition.

Educate yourself a bit and read what they are being fined for. It has nothing to do with lack of innovation within the EU! In fact the EU rules benefit other American/Asian tech companies operating within the EU by forcing Microsoft, Apple, Google etc to comply with competition/monopoly rules.

These companies were also ordered to comply with strict privacy rules to change how they were previously handling/stealing/selling/tracking users and their data. Again, nothing to do with lack of innovation, simply done to protect those living within the EU.

I don't understand how or why you think the EU should subsidise innovation within the EU either. When part of the EU, the UK were the only really major players within the tech space & the rest of the continent was mostly a barren wasteland when it came to tech. The EU weren't going to magically make their members major players by throwing money at it. It was too late for that.

 

[Jackbequickly]

We better as soon, before November, Taiwan chips will no longer be available to America.

 

[GrayFlannel]

I expect TSMC will make use of this money more quickly and more effectively. Intel's foundry business is hemorrhaging money and they keep delaying construction starts.

I don’t have any prediction over effectiveness. Microsoft said they will be Intels first customer for the 18A. Global Foundries are a recipient of $1.5bn with Micron and Samsung expected to get a bite of the apple too.

 

[Boil]

TSMC has multiple clients, Apple being one of them. That is a very misleading news title.

Seems like an appropriate news title for a website called MacRumors...

 

[Timo_Existencia]

Educate yourself a bit and read what they are being fined for. It has nothing to do with lack of innovation within the EU! In fact the EU rules benefit other American/Asian tech companies operating within the EU by forcing Microsoft, Apple, Google etc to comply with competition/monopoly rules.

These companies were also ordered to comply with strict privacy rules to change how they were previously handling/stealing/selling/tracking users and their data. Again, nothing to do with lack of innovation, simply done to protect those living within the EU.

I don't understand how or why you think the EU should subsidise innovation within the EU either. When part of the EU, the UK were the only really major players within the tech space & the rest of the continent was mostly a barren wasteland when it came to tech. The EU weren't going to magically make their members major players by throwing money at it. It was too late for that.

I've educated myself a lot. Thanks. This is pure protectionism dressed up in "consumer protection." That doesn't mean that I don't agree with some of the rules within the DMA. But those aren't the primary reasons for the DMA.

The idea that this will in some way benefit tech companies is not credible. This is a power play by the EU to be relevant in a market in which it has almost no voice. And, over time, this approach will prove detrimental, just as the previous business climate has failed to produce strong tech within the borders of the EU. Ask yourself, if you were going to start a new tech enterprise, would you choose to do it in the EU? Most companies will shy away from the aggressive tactics being taken by the EU.

I'm not saying the EU has to subsidize tech; I'm just saying it would be a better effort than this ham-fisted power grab with short-term feel-goods and long-term downsides.

 

[Analog Kid]

I don’t have any prediction over effectiveness. Microsoft said they will be Intels first customer for the 18A. Global Foundries are a recipient of $1.5bn with Micron and Samsung expected to get a bite of the apple too.

When your first foundry customer is a software company, that's not a great headline. Yeah, there's talk that MS has a first generation custom chip, but that's not a scale that will keep a fab open. And every chip MS makes of their own design is one less they'll source from Intel, so it's kind of a wash in the end. TSMC serves Nvidia, Apple, AMD, Qualcomm and on and on. That's a foundry at scale.

I think the money being pumped into Intel is a hope that we can have a world class semiconductor based in the US, but Intel sure is making that hard. They couldn't succeed when it was their own livelihood on the line, I'm not sure how the government handout will bring change.

 

[GrayFlannel]

When your first foundry customer is a software company, that's not a great headline. Yeah, there's talk that MS has a first generation custom chip, but that's not a scale that will keep a fab open. And every chip MS makes of their own design is one less they'll source from Intel, so it's kind of a wash in the end. TSMC serves Nvidia, Apple, AMD, Qualcomm and on and on. That's a foundry at scale.

I think the money being pumped into Intel is a hope that we can have a world class semiconductor based in the US, but Intel sure is making that hard. They couldn't succeed when it was their own livelihood on the line, I'm not sure how the government handout will bring change.

Intel has committed over $100bn in chip manufacturing over the next five years and will benefit from tax credits. I understand you want to discuss Intel failing and will leave you to do that. My interest is in the general US market.

 

[avz]

...though I'm guessing if a fab happened it'd be in Eastern Europe... but not in "arms reach" of Putin...

Fleet is being...

 

[Analog Kid]

Intel has committed over $100bn in chip manufacturing over the next five years and will benefit from tax credits. I understand you want to discuss Intel failing and will leave you to do that. My interest is in the general US market.

I'm less interested in Intel's failure (ok, I'm a little interested, they've been coasting for too long), but more interested in seeing government funding used for growth. From a "free market" perspective, which was raised earlier, it's good to see US money supporting more than US companies while still helping employment and supply chain diversification in the US. I'd been worried that this was going to just be a massive transfer payment to Intel, and it's turned out to not be that.

 

[trichardlin]

The Taiwanese government effectively created TSMC and owns a big chunk of the shares.

To clarify, 'big chunk' is just over 6%.

Actually Philips was one of the major founding members of TSMC and once owned 27.6% of TSMC shares in the late '90s, but they sold off all the shares by 2008. Today, most of the shares are owned by foreign investment companies, and looks like no one owns more than 0.2% of the company except for Morris Chang.