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$37 Billion in Chips Act awards TSMC, GlobalFoundries to lead US Semiconductor expansion

Taiwan Semiconductor Manufacturing Co. and GlobalFoundries are close to final award agreements under the US Chips and Science Act, according to sources familiar with the matter. The Commerce Department recently informed Congress that at least three companies, TSMC and GlobalFoundries among them, were in line for final awards. The alert is a standard procedural requirement where Congress must note any deals over $10 million at least 15 days before they become final.

The 2022 Chips and Science Act is a bipartisan law meant to further semiconductor manufacturing in the US Preliminary agreements amounting to $37 billion are on top international chip manufacturers, aiming to reduce dependence on Asia. So far, though preliminary deals were allocated to 21 companies, only one award has been announced. That was the $123 million award received by Polar Semiconductor to upgrade its Bloomington, Minnesota, facility toward chip manufacturing.

The US unit of TSMC preliminarily agreed in April to a $6.6 billion grant to subsidize advanced semiconductor production in Phoenix, Arizona. In an earlier deal in February, GlobalFoundries won a preliminary award worth $1.5 billion to build a new manufacturing site in Malta, New York, as well as expand existing facilities in Burlington, Vermont.

Congress's notification says these deals are moving ahead but recipient concerns over potential changes in US leadership have added to anxiety. If Donald Trump wins and comes back to the Oval Office, he had promised to vote against the Act. Recently, he criticized the policy, this time branding it "so bad," during an interview with him holding onto the view that high tariffs are the thing needed instead of subsidies.

Republican House Speaker Mike Johnson also indicated that the Act may be repealed. He later backtracked, clarifying that there was no concrete plan he had devised to roll back the law. Some of the reasons why final awards were delivered late revolve around the complaints raised by communities about previous awards being vague.

The Polar Semiconductor award was one criticized along with environmental and labour reasons that made the administration pin hopes on rolling out more after the elections. Additional childcare and labour provisions have also been the cause for a protracted negotiation.

US chip companies are eager to see the grants secured, though. Intel, anticipating a grant of $8.5 billion, stated that it would continue working towards building a competitive semiconductor ecosystem. “We will continue doing our part and encourage the Department of Commerce to speed up and streamline the process,” the company said.

Commerce Department spokesman Jamie Lewis said TSMC and GlobalFoundries were not confirmed, repeating that congressionally mandated notification was an automatic part of the process, not that the terms would be awarded.