[News] CHIPS Act Funding Highlights before Trump Takes Office: TSMC, Intel, Samsung, and More

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Following the footsteps of semiconductor bellwethers TSMC and Intel, as well as memory giants Micron and SK hynix, Samsung has hopped on the last minute opportunity of securing the funding under the CHIPS Act in Biden’s term. According to U.S. Department of Commerce, it has finalized a nearly USD 4.75 billion government subsidy for Samsung.

However, this would mark a 26% cut compared to the preliminary award announced in April of up to USD 6.4 billion. A Reuters report, citing a commerce spokesperson, notes that the department modified this award to better reflect market conditions and the scale of Samsung’s investment.

In a Wall Street Journal report, U.S. Secretary of Commerce Gina Raimondo argued that trying to restrict China is futile, highlighting the importance of the CHIPS and Science Act, which has enabled significant investments in U.S. chip infrastructure.

Interestingly enough, her remarks kind of contrasts with Biden’s continuous efforts to advocate for sanctions against Chinese firms. Moreover, in addition to the discrepancies between the previously promised award and the actual amount under the CHIPS Act, there is even one company that chose to give up the subsidy altogether due to worsening market situations. Here’s a quick summary from TrendForce on the highlights of the grants to key semiconductor companies.

TSMC: First Major Award under CHIPS Act

In mid-November, The US Commerce Department finalized a USD 6.6 billion government subsidy for TSMC’s Arizona plant, which is identical with the agreement announced back in April. According to Reuters, this marks the first major award under the USD 52.7 billion CHIPS Act program, which was initiated in 2022.

According to TSMC, Arizona’s first fab is on track to begin production using 4nm technology in the first half of 2025.

Intel: Subsidy Slightly Lower than Expected, with a Premise on Foudry Sale

In late November, Intel secured the USD 7.86 billion in direct funding under the U.S. CHIPS Act, which is lower than the USD 8.5 billion previously announced, possibly due to challenges in the company’s execution and delays related to the Ohio plant.

With an initial plan to begin chip manufacturing in Ohio in 2025, Team Blue has now postponed the pipeline, aiming to complete the fabs in 2026-27, with operations expected to commence around 2027-28.

In addition, there is a premise: Intel would not be allowed to sell its stake in the chipmaking unit at will, according to an earlier report from Reuters.

In a securities filing seen by Reuters, Intel must retain at least 50.1% ownership of Intel Foundry if it becomes a privately held company. If the unit goes public and Intel is no longer the largest shareholder, the company would be limited to selling no more than 35% of Intel Foundry to any single investor before triggering change-in-control provisions, the report suggests.

Samsung with the Largest Subsidy Reduction

Samsung’s USD 4.75 billion government subsidy under the CHIPS Act, on the other hand, is significantly lower than preliminary award announced in April of up to USD 6.4 billion.

According to the Chosun Daily, Samsung’s subsidy-to-investment ratio is approximately 13%, which is higher than TSMC, Intel, and Micron, but the reduction in the subsidy amount is the largest.

Unlike its memory archrival SK hynix, the funding Samsung receives is mainly focused on its expansion for its advanced nodes led by 2nm, including two new leading-edge logic fabs and an R&D fab in Taylor, as well as an expansion to their existing Austin facility.

However, rumors have been circulating that Samsung was cutting up to 30% of its overseas workforce, with potential issues with its 2nm yield. According to Taylor Press, Samsung may delay its Taylor production to 2026 from early 2025.

Micron and SK hynix: Keep Advancing in Advanced DRAM

Notably, Micron is the first memory giant to secure the funding under the CHIPS Act, as the U.S. Commerce Department finalized a USD 6.165 billion subsidy on December 10th, which matches the amount announced in April.

As noted in its press release, Micron’s fabs in Idaho New York are expected to help the U.S. grow its share of advanced memory manufacturing from less than 2% in 2024 to approximately 10% by 2035.

Shortly after, on December 19th, South Korean memory giant SK hynix was awarded up to USD 458 million under the CHIPS Act, slightly higher than the USD 450 million announced in August.

The NVIDIA HBM supplier announced plans to invest USD 3.87 billion in the construction of the West Lafayette facility, which will feature an assembly line designed to mass-produce next-generation HBM chips, according to Reuters.

While Samsung’s HBM3e is still struggling to pass NVIDIA’s qualification, SK hynix announced in late September that it has begun mass production of the world’s first 12-layer HBM3E product with 36GB.

Micron, on the other hand, confirmed that it has started shipments of production-capable HBM3E 12-hi 36GB units to key industry partners, and expects to ramp its 12-hi HBM3E in early 2025.

Microchip: the First Dropout of CHIPS Act

On the other hand, according to Bloomberg, Microchip has halted its application for U.S. semiconductor subsidies, becoming the first known company to step back from the CHIPS and Act.

Previously expected to receive USD 162 million for plants in Oregon and Colorado, the company has faced challenges, including worker furloughs at its Oregon facilities and plans to close an Arizona factory, as noted by the report. More highlights of the grants to key semiconductor companies are as below:

(Photo credit: Micron)