Taiwan Semiconductor Manufacturing Company, the world’s leading maker of advanced chips, isn’t too happy about some of the limitations associated with US government funding, even as it demands billions of dollars from officials to finish its $40 billion project in Arizona.
TSMC is seeking a total of $15 billion in US government support, according to reports Wall Street Journal Citing an insider on the company’s plans. The chipmaker already expects about $7 billion to $8 billion in tax credits, and could request up to $7 billion in grants.
The US passed the CHIPS & Science Act last August, which includes about $52 billion in incentives for chip manufacturing in the US. Chipmakers, such as Intel Corporation and Micron Technology, have said that their construction of new US factories depends on government subsidies provided under the CHIPS Act.
TSMC also hopes to use government funds to support its $40 billion project in Arizona. The Taiwanese chip maker announced it would build a second factory on the site last December, at a ceremony with US President Joe Biden, Apple CEO Tim Cook, and other business leaders.
conditions
However, the US government money also comes with stringent conditions on its recipients, which TSMC fights back when it begins work at its two plants in Arizona.
“Some conditions are unacceptable,” said Mark Liu, president of TSMC. industry meeting In Taiwan at the end of March.
In particular, TSMC is concerned about rules that require the company to share some profits with the US government if revenue exceeds expectations. According to the Wall Street Journalthe chipmaker is concerned that calculating profit will be difficult due to global supply chains, and that planned Arizona plants may not be worth the investment if profit is capped.
TSMC did not immediately respond to a request for comment.
The United States included these requirements to ensure that companies could not generate excessive profits after receiving government funds. “We do not write blank checks to any company that asks for it,” He said US Secretary of Commerce Gina Raimondo in February.
Profit sharing agreements are just some of the conditions on companies that receive funds. Recipients of government funding must provide affordable childcare.
The recipients are too restricted of expanding chip manufacturing into “countries of interest”, which includes China. (The US has also tightly restricted exports of chips and advanced chip-making equipment to China, and is encouraging allies like Japan and the Netherlands to do the same.)
Korean chipmakers such as Samsung and SK Hynix particularly concerned Around these limits, since it has the largest presence in China including the leading chip manufacture.
Korean ministers have complained to Biden officials about the CHIPS Act, along with the country’s commerce ministry say Its terms “deepen trade uncertainties, violate corporate governance and technology rights, and make the United States less attractive as an investment option.”
TSMC also has operations in China, which are largely limited to making older chips with more lenient restrictions. Still, deteriorating relations between the US and China, and between Beijing and Taipei, remain a potential headwind for the chip industry. Investor Warren Buffett sold most of his $4.1 billion stake in TSMC last year, citing geopolitical tensions in an interview with Nikki Asia.
The chip market is currently stagnating, thanks to declining demand for computers and consumer electronics. On Thursday, TSMC weather forecast A decline in low-to-mid single-digit revenue in 2023, as part of its earnings report. However, the chip maker too mentioned $6.8 billion in net income for the fourth quarter, ahead of the $6.4 billion expected by analysts.
