With President Joe Biden soon to leave office, the Commerce Department is winding down its operations, including allocating billions of dollars in subsidies to help make the latest chips on American soil.
The Commerce Department will provide up to $6.6 billion in direct funding to Taiwan Semiconductor Manufacturing (TSMC) for three semiconductor manufacturing facilities in Arizona, according to a Friday press release. It would also provide another $5 billion in proposed loans.
By the end of the year, the company will already have $1 billion in funding in hand. The New York Times.
The funds will complement the $65 billion TSMC has already pledged to build chip manufacturing facilities in Arizona. According to the Commerce Department, the funding will create 6,000 direct manufacturing jobs and more than 20,000 unique construction jobs.
The investment, which the Commerce Department has called an “important step” toward strengthening the U.S. economy and protecting national security, will be awarded to the company based on its achievement of project milestones.
“The leading chips that will be manufactured in Arizona are the foundation of the United States’ technological and economic leadership in the 21st century,” Commerce Secretary Gina Raimondo said in a statement. “Because of President Biden and Vice President Harris, the most advanced semiconductor technology on the planet will be made in America, creating thousands of jobs.”
By 2028, TSMC is expected to produce its most advanced chips in Arizona that are used in the fastest laptops and smartphones, as well as in AI data centers.
The TSMC subsidies announced Friday were made under the CHIPS Act, which was signed into law by President Biden in 2022. The agreement follows an initial April agreement between the Commerce Department and TSMC and follows months of due diligence.
The race to finalize agreements under the CHIPS Act comes as Biden prepares to leave office in January. President-elect Trump previously criticized the CHIPS Act during an October interview with Joe Rogan.
“All you had to do was charge a tariff on them,” Trump said during the interview. “If you put a tariff on incoming chips, you’d be able to be like the auto companies, no different. More sophisticated, no different.”
While Trump has not explicitly said he would repeal the CHIPS Act, a key Trump ally, House Speaker Mike Johnson (R-La.) said earlier this month that he would. The party will “probably” move to repeal the law, before later backing down. statement
Trump’s transition team did not immediately respond. good luckRequest for comment.
The Biden administration is expected to finalize more grant awards in the coming weeks as the outgoing president looks to cement his legacy and that of Democrats after a disappointing November election. The New York Times Reported
The Commerce Department did not immediately respond. good luckRequest for comment.
Chip factories, like the one being built by TSMC in Arizona, take years to build and production of the most advanced chips won’t begin until Trump’s presidency. Still, trying to offshore more chip manufacturing could be beneficial for Trump as well.
Currently, only 10 percent of the world’s semiconductors are produced in the United States. Times That figure is a far cry from the reported 37 percent of chips that were produced domestically just 30 years ago.
