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TSMC, Samsung Urge U.S. to Allow Them Into $52 Billion Chip Plan

Daniel Nenni

Admin
Staff member
(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. urged the U.S. to allow foreign companies to participate in a $52 billion federal program aimed at boosting chip production on American soil.

“Arbitrary favoritism and preferential treatment based on the location of a company’s headquarters is not an effective or efficient use of the grant and ignores the reality of public ownership for most of the leading semiconductor companies,” TSMC said in a response to the U.S. Department of Commerce’s request for information to help the agency plan and implement federal funding for the chip industry.

TSMC added that the U.S. should not try to duplicate the existing supply chain but rather focus on developing advanced technologies to increase its competitiveness. The Taiwanese company also called for reform of the immigration policy so the U.S. can attract foreign talent to help drive innovation.

Samsung echoed TSMC’s comments on incentives for foreign chip firms. It said the U.S. government should ensure all qualifying companies, irrespective of their countries of origin, can compete for U.S. funding “on an even playing field.”

 
I honestly would've thought that the CHIPS Act would've passed by now given its strategic importance, the chip shortage and bipartisan popularity. Yet we're still here talking about it more than 9 months later. 🙄

I still believe some version of it will pass THIS year but given the (surprisingly lengthy) delay/loss of momentum, (seemingly) greater availability of chips, price tag and perception that the US taxpayers are subsidizing the semiconductor industry I'm not going to hold my breath for Pat Gelsinger's wishlist (CHIPS Act 2 and CHIPS Act 3) to become a reality. Given that Intel seems to have dropped its view that only domestic firms get funding, Samsung and TSMC seem like they will receive a slice of whatever funding gets passed.
 
I honestly would've thought that the CHIPS Act would've passed by now given its strategic importance, the chip shortage and bipartisan popularity. Yet we're still here talking about it more than 9 months later. 🙄

I still believe some version of it will pass THIS year but given the (surprisingly lengthy) delay/loss of momentum, (seemingly) greater availability of chips, price tag and perception that the US taxpayers are subsidizing the semiconductor industry I'm not going to hold my breath for Pat Gelsinger's wishlist (CHIPS Act 2 and CHIPS Act 3) to become a reality. Given that Intel seems to have dropped its view that only domestic firms get funding, Samsung and TSMC seem like they will receive a slice of whatever funding gets passed.

Personally I'm against it. Keep politics out of the semiconductor supply chain. It is complicated enough without the endless politicking.
 
Personally I'm against it. Keep politics out of the semiconductor supply chain. It is complicated enough without the endless politicking.
Are you against the idea of government investing in this industry or something specific to the US CHIPs act itself ? (Or the whole thing ?)
 
Personally I'm against it. Keep politics out of the semiconductor supply chain. It is complicated enough without the endless politicking.

Samsung's revenue was equal to 17% of South Korea's $1,082 billion GDP in 2013. "You can even say the Samsung chairman is more powerful than the President of South Korea.". That's 2013. Today Samsungs revenue is only worth 14% of South Koreas GDP.

TSMC's $40 Billion 2022 capex plans equal to 5% of Taiwans economy.

When companies get too big, they can influence politics. Which is what has happened with South Korea, Taiwan, and now the USA (which is what the CHIPS act is).

For comparison Intel's $79.02 billion in revenue only equals 0.3% of USA GDP.

Still, it is in a companies best interest to get as much free money as they can to help them succeed.

Of course politics would be better left out of it all in a true free market. But it's not happening.
 
Personally I'm against it. Keep politics out of the semiconductor supply chain. It is complicated enough without the endless politicking.
Well, is not the current crisis (chip shortages) a result of many years of the politicians avoiding any interference into semiconductor supply chain?
 
Interesting article on DigiTimes. The full article is paywalled but the introduction says the following:

It may be hard for TSMC to generate profits from its new advanced wafer fab in Arizona when the facility becomes operational, if the US government fails to carry out its commitment to relevant subsidies and support, according to industry observers.

Source: TSMC Arizona fab unlikely to earn without government subsidies

I am curious what the problem is. Is it TSMC? Is it US costs?
 
(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. urged the U.S. to allow foreign companies to participate in a $52 billion federal program aimed at boosting chip production on American soil.

“Arbitrary favoritism and preferential treatment based on the location of a company’s headquarters is not an effective or efficient use of the grant and ignores the reality of public ownership for most of the leading semiconductor companies,” TSMC said in a response to the U.S. Department of Commerce’s request for information to help the agency plan and implement federal funding for the chip industry.

TSMC added that the U.S. should not try to duplicate the existing supply chain but rather focus on developing advanced technologies to increase its competitiveness. The Taiwanese company also called for reform of the immigration policy so the U.S. can attract foreign talent to help drive innovation.

Samsung echoed TSMC’s comments on incentives for foreign chip firms. It said the U.S. government should ensure all qualifying companies, irrespective of their countries of origin, can compete for U.S. funding “on an even playing field.”


I don't know the Samsung side but the TSMC's part of subsidies should be a done deal or more or less a question of final subsidy amount.
 
I was so ambivalent about the CHIPs act and the $52B handout, before the inflation and war issues. But now, I think there are bigger fish to fry.
A good time to disperse the $52B would be at the start of a recession—not during high inflation.
It’s adding fuel to the inflation fire to disperse it this year.
With the war in Ukraine I think the need for LNG and wheat are bigger priorities for the US. Europe and the Middle East could freeze or starve this winter otherwise.
What they need to do is go back in time to 2008, disperse the $52B then, prevent all the 8 inch fabs from closing (which are needed in 2022), to help reduce that recession.
 
I was so ambivalent about the CHIPs act and the $52B handout, before the inflation and war issues. But now, I think there are bigger fish to fry.
A good time to disperse the $52B would be at the start of a recession—not during high inflation.
It’s adding fuel to the inflation fire to disperse it this year.
With the war in Ukraine I think the need for LNG and wheat are bigger priorities for the US. Europe and the Middle East could freeze or starve this winter otherwise.
What they need to do is go back in time to 2008, disperse the $52B then, prevent all the 8 inch fabs from closing (which are needed in 2022), to help reduce that recession.

I'm okay with it but I see chip demand dropping this year and next so the urgency of the chip shortage will disappear. I found this report interesting but out dated:


We could hit a serious chip dip next year so this CHIPs Act could be dropped like a political hot potato. Reshoring could keep it alive but that is also a dream/nightmare.
 
Samsung's revenue was equal to 17% of South Korea's $1,082 billion GDP in 2013. "You can even say the Samsung chairman is more powerful than the President of South Korea.". That's 2013. Today Samsungs revenue is only worth 14% of South Koreas GDP.
Samsung's leader is definitely still powerful if not more powerful than the President of South Korea.

Samsung's leader Lee Jaeyong Released from jail

The Justice Ministry said it made the decision to release Lee after considering the effects of the pandemic on South Korea's economy and global markets.

In a statement, President Moon Jae-in's office said his release was made in the national interest and asked for understanding.
 
Samsung's leader is definitely still powerful if not more powerful than the President of South Korea.

Samsung's leader Lee Jaeyong Released from jail

The Justice Ministry said it made the decision to release Lee after considering the effects of the pandemic on South Korea's economy and global markets.

In a statement, President Moon Jae-in's office said his release was made in the national interest and asked for understanding.
Among 51 million people in South Korea, only one person, Lee Jae-yong, can save Samsung and revive South Korea's economy. Isn't it scary?
 
Among 51 million people in South Korea, only one person, Lee Jae-yong, can save Samsung and revive South Korea's economy. Isn't it scary?
Not just S.Korea. The Samsung expansion in Taylor TX could not be approved until after his release.
$17B USD is a lot of money, it requires the corporate seal.
 
I'm okay with it but I see chip demand dropping this year and next so the urgency of the chip shortage will disappear. I found this report interesting but out dated:


We could hit a serious chip dip next year so this CHIPs Act could be dropped like a political hot potato. Reshoring could keep it alive but that is also a dream/nightmare.
I don't like the CHIPs Act either, because I can't remember a case where US government centralized planning worked out well, but I'm curious why you think chip demand will fall off so much. Perhaps PC demand will flatten or fall a bit, but the cloud build-out is unlikely to slow much, HPC is growing a lot, IOT, the 5G build-out, worldwide demand for phones and tablets, automotive ramping production again, not to mention EVs... what do you think is the root cause of a chip slowdown? Worldwide recession?
 
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Interesting article on DigiTimes. The full article is paywalled but the introduction says the following:

It may be hard for TSMC to generate profits from its new advanced wafer fab in Arizona when the facility becomes operational, if the US government fails to carry out its commitment to relevant subsidies and support, according to industry observers.

Source: TSMC Arizona fab unlikely to earn without government subsidies

I am curious what the problem is. Is it TSMC? Is it US costs?
TSMC will make money, just not as much as other sites. The cost issue is discussed here: https://semiwiki.com/semiconductor-manufacturers/tsmc/303594-tsmc-arizona-fab-cost-revisited/
 
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