Biden Giving $6.6B to Taiwan Company for US Chip Production

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Facts

  • Aiming to encourage US-based production of advanced chips, the Biden administration announced on Monday that it has pledged to give Taiwan Semiconductor Manufacturing Co (TSMC) up to $6.6B to expand its facility in Arizona.1
  • In addition to the $6.6B grant, the US is also giving $5B in loans to help the chipmaker expand production from two to three facilities in Phoenix, Arizona, which will create more than 25K 'direct construction and manufacturing jobs.'2
  • Biden signed the CHIPS and Science Act in 2022 to revive the US semiconductor sector by granting major subsidies to attract private investment. This transaction promises to boost cutting-edge sectors like artificial intelligence (AI).1
  • According to the deal, TSMC will start making its most sophisticated semiconductors in Arizona by 2028 — including 2-nanometer chips or even more advanced technologies in the third facility, which is planned to open by 2030.3
  • The US Dept. of Commerce said it was necessary to give this subsidy because both TSMC and Intel chipmakers have experienced funding and market difficulties which had delayed their plans to construct chip fabrication plants.4
  • Dr. Mark Liu, TSMC Chairman, said that the new US funding enabled TSMC to expand its investment in the Arizona project. This makes it Arizona's greatest foreign direct investment and the United States' largest greenfield investment (ie. a project with no prior work constraints).5

Sources: 1Al Jazeera, 2Silicon Republic, 3Archive, 4Daily Caller and 5Silicon Semiconductor.

Narratives

  • Pro-establishment narrative, as provided by Guardian. President Biden is following through on his promise to ensure that the US has access to cutting-edge chip manufacturing on US soil — a major national security priority. By supporting TSMC's project, and providing nearly $20B in grants and loans to help the US manufacturer Intel reclaim its position as a chipmaking leader, the US will be a world leader in advanced technology. It will also create thousands of qualified jobs in Arizona.
  • Establishment-critical narrative, as provided by TechCrunch. While the White House may celebrate giving $6.6B to TSMC as a major investment into US chipmaking, the real story is how the announcement will contribute to escalating tensions with China. Chip manufacturing and Taiwan are at the heart of a soft conflict between Washington and Beijing, and Biden giving billions to a Taiwanese chip giant surely won't sit well. Deepening ties with TSMC will only add fuel to the fire.

Predictions