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Dept of Commerce announces CHIPS funds for TSMC and Samsung

April 18, 2024
By: Michele Hujber

The U.S. Department of Commerce has recently signed two non-binding preliminary memorandums of terms (PMTs) with semiconductor companies to provide direct funding under the CHIPS and Science Act. One company, the TSMC Arizona Corporation (TSMC Arizona), a subsidiary of Taiwan Semiconductor Manufacturing Company Limited (TSMC), will receive up to $6.6 billion to support the company’s investment of more than $65 billion in three greenfield fabs in Phoenix, Arizona. The second company, Samsung Electronics (Samsung), will receive up to $6.4 billion for two new logic fabs, an R&D fab, and an advanced packaging facility in Taylor, Texas, as well as an expansion to their existing Austin facility.

In addition to the proposed direct funding to TSMC, the CHIPS Program Office would make approximately $5 billion of proposed loans—which is part of the $75 billion in loan authority provided by the CHIPS and Science Act—available to TSMC Arizona under the PMT. The company has indicated that it is planning to claim the Department of the Treasury’s Investment Tax Credit, which is expected to be up to 25% of qualified capital expenditures.

TSMC Arizona is committing to build three fabs before the end of the decade. According to the Department of Commerce announcement, with this proposed funding, TSMC Arizona would be creating approximately 6,000 direct manufacturing jobs and more than 20,000 accumulated unique construction jobs. TSMC expects to begin high-volume production in their first fab in the U.S. by the first half of 2025.

In addition to the proposed direct funding for Samsung, the company has indicated that it plans to claim the U.S. Department of the Treasury’s Investment Tax Credit, which is expected to cover up to 25% of qualified capital expenditures. An announcement from Commerce indicates Samsung is expected to invest more than $40 billion in Central Texas and create more than 20,000 jobs.

In other semiconductor news, SK Hynix has announced plans to build a $4 billion microchip factory in Purdue University’s Research Park. Two days later, another microelectronics company, SkyWater, announced it was canceling its plans for a $1.8 billion semiconductor research and development facility in West Lafayette,  according to WTHR, a local television station. The company has released its option on the land on the Purdue University campus where it had planned to build the facility.

chips, semiconductors, dept of commerce