TSMC Optimistic About CHIPS Act Funding Under Trump

Taiwan Semiconductor Manufacturing Company (TSMC) is making significant strides in the United States with plans to establish advanced chip fabrication plants in Arizona. The company has been promised $6.6 billion from the Biden administration's CHIPS and Science Act. This funding is aimed at enhancing onshore semiconductor manufacturing, which is crucial for U.S. technological independence.

In a recent interview with CNBC, TSMC's Chief Financial Officer, Wendell Huang, expressed confidence that the funding would continue even under the incoming Trump administration. Huang stated that the financial support from the government is expected to come in as TSMC meets various construction and production milestones.

"In fact, we already received the first tranche of government funding during the fourth quarter, totaling $1.5 billion," Huang revealed. Despite some delays in production, the first fab in Arizona has started manufacturing advanced chips, with progress on the construction of two additional plants remaining on schedule. The second fabrication facility is anticipated to be operational by 2028.

TSMC's initial announcement regarding investments in Arizona was made in May 2020, and the total investment from the company for the three projects is over $65 billion. Much of the financial commitment came after the bipartisan CHIPS Act was signed in August 2022, which allocated nearly $53 billion to bolster the domestic semiconductor supply chain and mitigate competition from China.

With the upcoming presidential term, there are discussions about the potential impact of Trump’s administration on the CHIPS Act. Trump has previously criticized the bill, raising concerns over its costs compared to tariffs as a strategy for fostering local chip manufacturing. He has also accused Taiwan of “stealing” business from U.S. chip manufacturers.

However, industry analysts maintain that the bipartisan nature of the CHIPS Act suggests it is likely to remain intact. TSMC has established a strong working relationship with various levels of government, which C.E.O. C.C. Wei affirmed in a recent earnings call. He highlighted TSMC's ongoing communication with both the current and future administrations.

As TSMC continues to navigate this changing political landscape, the company recently reported record profits thanks to high demand for its AI chips, witnessing a nearly 4% increase in its shares.

TSMC's strategy and investments are positioned to significantly enhance the United States' semiconductor manufacturing capabilities, reinforcing its role in the global tech landscape regardless of political shifts.

TSMC, CHIPS, funding