TSMC set to receive over $5 billion in grants for US chip plant: Report

TSMC in focus: Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker, is reportedly in line to secure more than $5 billion in federal grants from the US government to establish a chipmaking facility in Arizona, according to Bloomberg News.

The finalisation of the award is pending, and it remains uncertain whether TSMC will also utilise the loans and guarantees offered by the 2022 Chips and Science Act, as per sources familiar with the matter cited in the report.

Both TSMC and the US Commerce Department have not yet responded to requests for comment from Reuters.

TSMC, known for producing chips for Apple's iPhones among others, has committed approximately $40 billion for its Arizona plant, marking one of the largest foreign investments in US history.

The United States aims to bolster domestic semiconductor production through the US CHIPS Act, which allocates $52.7 billion in funding, including $39 billion for semiconductor production subsidies and $11 billion for research and development.

In a recent announcement, the Biden administration disclosed a $1.5 billion award to contract chip manufacturer GlobalFoundries under the Act.

US Commerce Secretary Gina Raimondo revealed plans in February to make multiple funding awards within two months.

TSMC's cutting-edge manufacturing processes are integral to the production of Nvidia's leading artificial intelligence chips. 

The company highlighted in January the strong demand for advanced packaging and the ongoing challenge to meet customer needs due to insufficient capacity, a bottleneck particularly affecting the scaling up of supply for complex AI chips.

(With Reuters Inputs)