[News] Subsidies to TSMC from Japan and China Increase Over Fivefold Annually

2024-03-07 Semiconductors editor

Geopolitical factors are driving countries to actively establish semiconductor manufacturing locally and offer subsidies. According to TSMC’s annual report, subsidies received from Japan and China amounted to NTD 47.545 billion in 2023, signaling a 5.74-fold increase from the previous year, reaching a record high. In contrast, the report also suggest the subsidies from the US government have yet to materialize.

TSMC did not specify the individual amounts of subsidies from the Japanese and Chinese governments. However, estimations cited by the report suggest that the Japanese government, aiming to revitalize the semiconductor industry, subsidized TSMC’s Kumamoto plant with up to JPY 476 billion, likely serving as the primary driver behind the substantial increase in TSMC’s subsidies in 2023.

The construction of TSMC’s Kumamoto Fab began in April 2022, with full assistance from the Japanese central and local governments. Recently, the opening ceremony was held, and trial production has commenced, with mass production expected in the fourth quarter of this year.

The subsidies from the Japanese and Chinese governments to TSMC are mainly used to subsidize the costs of real estate, buildings, and equipment purchases, as well as some of the costs and expenses associated with building construction and production operations.

On the other hand, TSMC’s US fab began construction in early 2021, with a grand tool-in ceremony held in December 2022, attended by the US President. Initially planned to invest USD 12 billion, the facility aims to build a N5 process fab with a monthly capacity of 20,000 wafers. Construction was scheduled to commence in 2021, with mass production slated to begin by the end of 2024, creating approximately 1,600 job opportunities in the local area.

However, it was previously reported by the TechNews that due to the delay in the first phase’s production timeline from the end of 2024 to the first half of 2025, the production schedule for the second phase will also be postponed to start after 2027. Subsequently, the production schedule has been pushed from this year to next year.

Despite the US government’s declaration to reinvigorate manufacturing and the introduction of the “CHIPS Act,” totaling USD 52 billion in subsidies, only three US companies have been subsidized so far.

These include BAE Systems, Microchip, and the third-largest foundry, Global Foundries, with Global Foundries receiving the most substantial subsidy of USD 1.5 billion. As of now, subsidies for TSMC have yet to be finalized.

(Photo credit: TSMC)

Please note that this article cites information from Liberty Time News and TechNews.