US finalizes $406 million subsidy for Taiwan semiconductor part maker

TAIPEI, Taiwan – The United States finalized a $406 million grant for GlobalWafers, a key Taiwanese semiconductor component manufacturer, amid concerns that President-elect Donald Trump might overturn a law promoting U.S. semiconductor production through subsidies, including to foreign companies.

Trump has expressed a preference for using tariffs over subsidies to encourage domestic semiconductor manufacturing, noting that tariffs on imported chips would incentivize companies to relocate production to the U.S. without the need for government spending.

The funds for projects by GlobalWafers in Texas and Missouri will establish the first high-volume U.S. production of 300-mm wafers for advanced semiconductors and expand production of silicon-on-insulator wafers, the U.S. Commerce Department said in a statement on Tuesday.

Wafers are thin slices of silicon used as the base for making semiconductors. They undergo layering and etching to create circuits for chips used in technologies like AI, 5G, and computing. Their quality is crucial for chip performance.

“The semiconductor wafers that will be produced here in the U.S. because of this investment in GlobalWafers are the foundation of the advanced chips that will help us out-innovate and out-compete the rest of the world,” said U.S. Secretary of Commerce Gina Raimondo.

The subsidy will also support nearly US$4 billion in investments by GlobalWafers in both states to construct new wafer manufacturing facilities and create 1,700 construction and 880 manufacturing jobs, the department added.

“As we plan to achieve the first milestone in the first half of next year, we have an opportunity to receive the first CHIPS Act funding by the end of next year, if everything progresses smoothly,” GlobalWafers chairwoman Doris Hsu told reporters.

The CHIPS Act is designed to strengthen U.S. semiconductor manufacturing by offering subsidies, grants, and incentives to companies, including foreign manufacturers like Taiwan’s GlobalWafers, to invest in semiconductor production within the U.S.

Domestic opinions on the act are divided. Supporters argue it’s vital for boosting U.S. semiconductor production, reducing reliance on foreign supply chains, and ensuring national security. Critics, however, see it as excessive government spending that favors large corporations and question its effectiveness.

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Trump, in a November media interview, criticized the Act.

“When I see us paying a lot of money to have people build chips, that’s not the way … you could have done it with a series of tariffs,” he said.

GlobalWafers’s Hus said, however, she believed the U.S. government would uphold the law and that no major changes would occur as Washington has a good track record of living up to its promises even after Trump takes office on Jan. 20.

GlobalWafers is set to establish and expand facilities in Sherman, Texas, to produce wafers for leading-edge, mature-node, and memory chips, and a new facility in St. Peters, Missouri, focused on wafers for defense and aerospace applications.

Five major companies, including GlobalWafers, dominate more than 80% of the global 300-mm silicon wafer market, with approximately 90% of silicon wafers manufactured in East Asia.

Edited by RFA Staff.

This content originally appeared on Radio Free Asia and was authored by Taejun Kang for RFA.

This post was originally published on Radio Free.