Biden Admin Teases More Major CHIPS Investments After TSMC Announcement

Taiwan Semiconductor Manufacturing Company (TSMC) has agreed to boost investment in the US by more than 60% - to over USD$65 billion – and build leading-edge 2-nanometer semiconductors in the US for the first time.

• Commerce Secretary Gina Raimondo said yesterday: “After initially announcing two fabs in the U.S., TSMC Arizona is committing to build an additional third fab before the end of the decade… For the first time ever, we will be making, at scale, the most advanced semiconductor chips on the planet here in the United States of America.”
• President Biden said in a statement: “These facilities will manufacture the most advanced chips in the world, putting us on track to produce 20% of the world’s leading-edge semiconductors by 2030.”
• In additional to USD$6.6 billion in direct funding under the CHIPS and Science Act to spur the investment, Nikkei notes that “TSMC will also receive $5 billion in loans and be able to claim an investment tax credit of up to 25% of capital expenditures.”
• Raimondo also hinted at more CHIPS grants to follow, which would likely necessitate a second major tech funding bill in the future. "This is our fifth CHIPS announcement. We're on a roll, so we have more to come in the weeks ahead.”
• Raimondo said at an event last month: "I suspect there will have to be — whether you call it CHIPS 2 or something else — continued investment."

Figure 1: CHIPS and Science Subsidies by Company, USD$ billions