Taiwan Semiconductor Manufacturing Co. (TSMC) and GlobalFoundries have finished negotiating binding agreements for billions of dollars in grants and loans to support US factories, people familiar with the matter said, as Biden administration officials race to get Chips and Science Act money out the door.
It is unclear when the agreements will officially be signed and the incentives unveiled, according to the people, who asked not to be identified because the conversations are private. The award amounts are roughly in line with preliminary agreements announced earlier this year, the people said.
TSMC’s package announced in April includes US$6.6 billion ($8.8 billion) in grants and as much as US$5 billion in loans to support the construction of three semiconductor factories in Phoenix.
GlobalFoundries’ agreement from February is for US$1.5 billion in grants and as much as US$1.6 billion in loans to support a new plant in New York state, as well as expansions of existing facilities there and in Vermont.
TSMC, GlobalFoundries and the Commerce Department declined to comment.
The Chips Act set aside US$39 billion in grants — plus billions more in loans, and 25% tax credits — to revitalise American semiconductor manufacturing after decades of production shifting to Asia. It has generated 10 times that amount in promised private investment, including factories for advanced chips, older-generation semiconductors and supply chain components.
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More than 20 companies are in line to win government funding, and they’ve spent months undergoing a due diligence process after negotiating preliminary accords. There’s also almost US$3 billion left to divvy up into preliminary agreements.
That means it’s extremely likely that some of the funding will be finalised under the leadership of Donald Trump, who will take the White House in January. Once contracts are signed, money will be disbursed in tranches based on project-specific milestones.
Industry officials are anxious to get things squared away as quickly as possible, both to allow money to start flowing to projects that have hit those benchmarks — and due to recent comments from Trump disparaging the program as “so bad”.
It’s not yet clear what Republican control will bring. House Speaker Mike Johnson said he wants to “streamline” the law, after floating — and then immediately walking back — the possibility of a wholesale repeal.
