‘TSMC wants up to $15 billion in support from the US government for two fabs in Arizona’
TSMC would like fifteen billion dollars in subsidies and tax credits from the US government for the planned construction of two factories in the state of Arizona. However, the government would have a number of conditions for this support that are ‘unacceptable’ for TSMC.
The company hopes to receive $7 to $8 billion in tax credits through the American Chips Act, writes The Wall Street Journal based on sources. In addition, the company would like $6 to $7 billion in subsidies. This money would be necessary because certain construction costs in the United States are many times higher than in Taiwan. TSMC founder Morris Chang previously said that it is at least fifty percent more expensive to make chips in Arizona than in Taiwan.
However, the American government would not want to provide the support without conditions. For example, chip companies that receive more than $150 million in subsidies must give part of their profits to the government if the profits achieved thanks to the subsidy are higher than expected. TSMC says it has concerns about the success of the Arizona chip factories if their profitability is “constrained” by this condition. In addition, according to the sources, it would be difficult to calculate the profitability of the two factories. The US government says this condition can be waived ‘in exceptional circumstances’.
The second controversial condition is that the government would want far-reaching information about TSMC’s accounting and business operations. However, the chip manufacturer does not want this information, for example about its customers and production techniques, to become public. This information is important to the U.S. government to ensure that the grants are used “as promised.”
It is not clear whether US support for TSMC is necessary to build the chip factories. One of the chip factories is already being built and should be ready next year. The second chip factory should be ready for chip production in 2026. TSMC itself is investing about forty billion dollars in the construction of the two factories.