TSMC, GlobalFoundries poised to get final Chips Act awards, sources say
By David Shepardson, Karen Freifeld and Alexandra Alper
WASHINGTON (Reuters) -Taiwan Semiconductor Manufacturing Co, GlobalFoundries (NASDAQ:GFS ) and at least one other chipmaker are poised to receive their final Chips and Science Act awards from the Biden administration, two people briefed on the matter said.
The U.S. Commerce Department recently notified Congress at least three companies are close to receiving a final award, one of the people briefed on the matter and another source familiar with the negotiations said. Under the Chips Act, the Commerce Secretary must notify appropriate committees at least 15 days before making any deal over $10 million.
The notification is a sign of progress amid concern about the pace of the award rollout.
TSMC, GlobalFoundries and the unidentified third company are among 21 awarded about $37 billion in preliminary agreements through the bipartisan 2022 Chips and Science Act, aimed at luring chipmakers out of Asia to expand production in the U.S. So far, only one has been finalized and announced. It went to Polar Semiconductor for $123 million to expand and modernize a chip fab in Bloomington, Minnesota.
Reuters could not determine the timing of the award announcements or the exact amount, though it is expected to be close to the initial sum.
In April TSMC's U.S. unit was awarded a $6.6 billion subsidy for advanced semiconductor production in Phoenix, Arizona, in a preliminary agreement with the Commerce Department.
In February, GlobalFoundries was awarded $1.5 billion to build a new semiconductor production facility in Malta, New York, and expand existing operations there and in Burlington (NYSE:BURL ), Vermont.
The fact that Congress has been notified of at least three deals shows the Biden administration is making headway on final terms, amid growing concern among award recipients that Republican Donald Trump could scuttle the grants when he becomes president. Reuters could not determine if the other company closed its deal.
TSMC and GlobalFoundries declined to comment.
A Commerce department spokesperson decline to comment on TSMC and GlobalFoundries, but said: “Per statute, the congressional notification is a routine part of the Chips Program Office process and doesn’t indicate that the award terms are final.”
POSSIBLE REPEAL
In October, Trump described the Chips Act as "so bad,” during an episode of Joe Rogan's podcast. “We put up billions of dollars for rich companies,” he said.
“When I see us paying a lot of money to have people build chips, that’s not the way,” Trump said. “You didn’t have to put up 10 cents. You could have done it with a series of tariffs. In other words, you tariff it so high that they will come and build their chip companies for nothing.”
Republican House Speaker Mike Johnson appeared to open the door to repealing the Act when a reporter asked him last week if Republicans would seek to repeal the law if they had a majority.
“I expect that we probably will, but we haven’t developed that part of the agenda yet,” Johnson said, before walking it back by later saying he misheard the question.
Blowback from community groups over the Polar Semiconductor award, including an alleged lack of transparency over labor, environmental and chemical components of the final deal, prompted the administration to hold off releasing the rest of the final awards until after the election, said two sources familiar with the inner workings of the negotiations.
Childcare and labor provisions in the deals have also taken time to negotiate, companies involved in the discussions said.
Still, companies want to complete their deals. Intel (NASDAQ:INTC ), which is waiting on $8.5 billion in grants, told Reuters in a statement: "We will continue to do our part and urge the Department of Commerce to accelerate and streamline the process to meet our collective goal to create a globally competitive U.S. semiconductor ecosystem.”
Source: Investing.com
