TSMC, Samsung urge US to allow them into US$52b chip plan

[TAIPEI] Taiwan Semiconductor Manufacturing (TSMC) and Samsung Electronics urged the US to allow foreign companies to participate in a US$52 billion federal programme aimed at boosting chip production on American soil.

The world's top 2 contract chipmakers are already both planning to spend billions of dollars to build new cutting-edge plants in the US The Biden administration has made it a priority to bulk up domestic manufacturing capacity, aiming to ensure supply after chronic shortages of semiconductors over the past 2 years.

Intel at one point suggested that US taxpayers' money should only go to domestic companies, though chief executive officer Pat Gelsinger has refrained from repeating the point in his more recent remarks. Intel's technology is at least one generation behind that of its Taiwanese and South Korean rivals.

"Arbitrary favouritism and preferential treatment based on the location of a company's headquarters is not an effective or efficient use of the grant and ignores the reality of public ownership for most of the leading semiconductor companies," TSMC said in a response to the US Department of Commerce's request for information to help the agency plan and implement federal funding for the chip industry.

TSMC added that the US should not try to duplicate the existing supply chain but rather focus on developing advanced technologies to increase its competitiveness.

The Taiwanese company also called for reform of the immigration policy so the US can attract foreign talent to help drive innovation.

Samsung echoed TSMC's comments on incentives for foreign chip firms. It said the US government should ensure all qualifying companies, irrespective of their countries of origin, can compete for US funding "on an even playing field."

TSMC is now building a US$12 billion fab in Arizona with the goal of making 5-nm chips in 2024, while Samsung is creating a US$17 billion plant in Texas with the aim of starting mass production also 2 years later.

Intel, meanwhile, has announced a new US$20 billion chip hub in Ohio and 2 new plants in Arizona to help boost capacity at home.

Yet the US House and Senate have been wrangling with how to combine their different versions of the legislation that includes US$52 billion of funding for the semiconductor industry. A final package is unlikely to be finalised before the end of May. BLOOMBERG