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Tech Industry

China and Japan gave TSMC over $1.5

billion in subsidies to build and equip
new fabs as US CHIPS Act payouts stall
News By Anton Shilov published March 7, 2024

More money, more fabs.

   Comments (0)

(Image credit: TSMC)

China and Japan have aggressively increased subsidies in the past year for
chipmakers in general and TSMC in particular. The company's 2023 annual
report indicates that the grants it received from Chinese and Japanese
governments increased 6.74 times year-over-year. In total, TSMC got
around $1.51 billion in government grants from China and Japan, which it
used to build and equip its fabs, notes TrendForce.
https://www.tomshardware.com/tech-industry/china-and-japan-gave-tsmc-over-dollar15-billion-in-subsidies-to-build-and-equip-new-fabs 1/8
3/18/24, 1:01 PM China and Japan gave TSMC over $1.5 billion in subsidies to build and equip new fabs as US CHIPS Act payouts stall | Tom'…

"Subsidiaries such as JASM and TSMC Nanjing received subsidies from the
governments of Japan and China, respectively, for local plants setup and
operation, which were mainly used to subsidize the purchase costs of
property, plant and equipment as well as partial costs and expenses
incurred from plant construction and production," TSMC's annual
report reads. "For the years ended December 31, 2023 and 2022, TSMC
received a total of $NT$47,546 billion ($1.51 billion) and NT$7,051 billion
($224.1 million) as government grants respectively."

Japan played a crucial role in this increase, with the Japanese government
providing substantial subsidies to TSMC's subsidiary Japan Advanced
Semiconductor Manufacturing (JASM) for its new Kumamoto plant in
Japan in a bid to rejuvenate Japan's semiconductor industry. TSMC's
Kumamoto Fab has received full backing from both the Japanese central
and local governments. This support has enabled construction of the fab to
progress smoothly, with mass production expected to commence in the
coming months.

Meanwhile, Japan is further increasing its support for TSMC by reportedly

offering an additional ¥732 billion ($4.86 billion) in grants to build its
second fab there.

Not much is known about how the Chinese government supported the
expansion of TSMC's 28nm-capable fab in Nanjing, but the world's largest
contract maker of chips did say that it had received support from the
People's Republic.

By contrast, TSMC's operations in Arizona have encountered setbacks. The

construction of TSMC's first new U.S. fab in years started in early 2021, with
a grand tool-in ceremony held in December 2022, and production start
scheduled for 2024. However, the timeline for the Fab 21 phase 1 has been
pushed back to 2025 due to an alleged workforce shortage in the state.
What's worse is that the company delayed equipment installation for Fab
21 phase 2 due to a lack of U.S. subsidies and uncertainties with demand.
As a result, the Fab 21 phase 2, which is believed to be capable of making
chips on 3nm-class technologies, will now come online in 2027 or 2028,
significantly later than originally expected.

Stay on the Cutting Edge

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Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over

the past couple of decades, he has covered everything from CPUs and
GPUs to supercomputers and from modern process technologies and
latest fab tools to high-tech industry trends.

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