The CHIPS Act was signed into law in August 2022 for developing America's semiconductor industry to reduce reliance on overseas chips manufacturing particularly from Taiwan and China. Hence, the Act is supported by the congress for the importance.
But under Trump administration the future of the Act might be jeopardized as he mentioned that Taiwan stealing US chip jobs and suggested alternative strategies to achieve semiconductor independence.
Taiwan Semiconductor Manufacturing (NYSE:TSM) is confused about the continuity of its three Arizona-based fabrication plants project because TSMC has already made a $65 billion commitment to build multiple chip factories in Arizona and offered more than 6,000 jobs there. And under Biden administration, the CHIPS and Science Act supported the project in direct funding of $6.6 billion along with government grants, loans, and tax credit.
TSMC is footing the majority of the funding, but the incentives and support from U.S. government are crucial to the project continuity in the U.S. and TSMC has received $1.5 billion in federal funding so far. But Trump's potential policy revisions could disrupt the trajectory.
However, there is a reason why the overall trajectory of TSMC's development in Arizona is likely to continue.
The Act has strong bipartisan support with a commitment to continue the implementation making it almost impossible for any single administration to completely roll it back. Semiconductor industry is important to the U.S. future economy and chips independency.
Both Republican and Democratic lawmakers view the CHIPS Act as vital and substantial investments already made, from TSMC itself and the government.
TSMC CFO Huang told CNBC that the second plant in Arizona will be completed in 2028. Maintaining the trajectory of projects like TSMC's Arizona facilities is essential. TSMC's Arizona development isn't just a business project, it's more like a national imperative and not in under any administrations this progress should be paused or reversed.
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