Final CHIPS Act Awards for TSMC and GlobalFoundries: Economic and Technological Implications

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Details and Implications of Final CHIPS Act Awards for TSMC and GlobalFoundries

TSMC and GlobalFoundries Awards

TSMC and GlobalFoundries are poised to receive their final awards under the CHIPS and Science Act. These awards are part of a broader initiative to revitalize the American semiconductor industry and enhance its competitiveness globally.
  • TSMC: TSMC will receive $6.6 billion in grants and up to $5 billion in loans to support the construction of three semiconductor fabrication plants (fabs) in Phoenix, Arizona. These fabs are expected to produce advanced chips using 2nm or more advanced processes, with production slated to begin by the end of the decade. The projects are expected to create approximately 6,000 direct manufacturing jobs and more than 20,000 construction jobs.
  • GlobalFoundries: GlobalFoundries is also set to receive significant funding under the CHIPS Act. The specific amount and details of their awards have not been fully disclosed, but it is clear that these funds are aimed at expanding and modernizing their U.S.-based semiconductor operations.

Funding Details for 2024

The CHIPS Act, signed into law in August 2022, allocates nearly $53 billion for semiconductor research, development, and manufacturing. Key funding details for 2024 include:
  • $39 billion in grants for the construction, expansion, and modernization of semiconductor fabs.
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  • $11 billion for semiconductor research and development.
  • $2 billion specifically for legacy chips used in automobiles and defense systems.

Implications of the Awards

The implications of these awards are significant for both TSMC and GlobalFoundries, as well as for the broader U.S. semiconductor industry:
  • Economic Impact: The funding will drive substantial economic activity, including job creation and investment in advanced manufacturing infrastructure. TSMC's projects alone are expected to generate tens of thousands of jobs, both directly and indirectly.
  • Technological Leadership: By expanding domestic semiconductor production, the U.S. aims to regain its leadership in semiconductor technology, which is crucial for national security and economic competitiveness. Advanced chips produced in these new fabs will support critical technologies like AI, high-performance computing, and defense systems.
  • Workforce Development: A major challenge highlighted by the awards is the need for a skilled workforce. The U.S. is currently short roughly 67,000 skilled workers in the semiconductor industry. Efforts are underway to address this gap through workforce development programs and apprenticeships.

Conclusion

The final awards under the CHIPS Act for TSMC and GlobalFoundries represent a significant step towards revitalizing the American semiconductor industry. These awards will not only boost economic activity and job creation but also enhance the U.S.'s technological capabilities and global competitiveness. However, addressing the workforce shortage remains a critical challenge that needs to be tackled to fully realize the benefits of these investments.