- Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: TSM) is going to be receiving government subsidies for its $12 billion chip plant in Arizona
Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: TSM) is going to be receiving government subsidies for its $12 billion chip plant in Arizona. The company is finalizing a design for the facility — which would also circumvent national security concerns and bring more manufacturing jobs to America.
TSMC is known as the main chipmaker for Apple and the company already selected a location for its future plant. Plus federal and state governments agreed to help make up for the highest costs of building semiconductors in the U.S. The negotiations on the specifics are still ongoing.
And TSMC’s decision to set up a plant in Arizona is happening partially due to White House officials pushing to create American jobs and building more sensitive components domestically over national security concerns. This project was announced before government officials had announced new limitations on sales of chips to Huawei.
“Subsidies will be a key factor in TSMC’s decision to set up a fab in the US,” said TSMC chairman Mark Liu via Bloomberg. “We are still talking to the US government. Our request is that the state and federal governments together make up for the cost gap between the US and Taiwan.”
Despite the limitations on working with Huawei, Liu reaffirmed the projections for 2020. And the company is still planning to spend as much as $16 billion this year on capacity upgrades. The company will see mid- to high-teen percentage rises in 2020 revenue.
TSMC is known to be the world’s largest and most advanced chipmaker for other companies. And Huawei is TSMC’s largest customer after Apple. Huawei’s business accounts for around 14% of TSMC’s sales.
“New restrictions can lead to a rebalancing among market players,” added Liu via Bloomberg. “We will still have a high market share after the rebalancing.”
