TSMC Snags US CHIPS Act Funding & Ups The Ante On Intel
TSMC now planning a third fab in Arizona
The long-expected announcement of TSMC’s share of US CHIPS Act funding finally landed and you can find the full press release from the company here.
At $6.6 billion, the proposed funding is just 23% less than Intel’s recently announced $8.5 billion. Along with the direct funding comes up to $5 billion in loans and tax credits of up to 25% on eligible capital expenditures.
In addition to the proposed US$6.6 billion in direct funding, the PMT also proposes to provide TSMC with up to US$5 billion in loans. TSMC plans to apply for U.S. Treasury Department Investment Tax Credits of up to 25% of the qualified capital expenditure at TSMC Arizona.
In contrast to the high-profile event which Intel staged and choreographed to announce their CHIPS Act funding, TSMC simply went with a press release. This makes sense. It would have been highly unlikely that President Biden and his entourage would make a second trip to Phoenix within the space of a month. Furthermore, there’s also the optics at play. Making a big deal out of giving CHIPs Act funding to Intel plays well to all audiences. Doing the same with a “foreign” company might not play quite so well with certain audiences.
Despite the low-key manner of their announcement, TSMC packed quite a punch in their press release. Apart from the funding details, they announced a third fab for Arizona, outlined the process technologies they would deploy in each of the three fabs and reiterated their financial model/roadmap including growth CAGR, Gross Margin and ROE. As if all that wasn’t enough, they concluded with testimonials from three of their biggest US-based customers, namely Apple, NVIDIA and AMD. We review the details and share out thoughts on what all this means for Intel.
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