GlobalWafers, a leading Taiwanese semiconductor component producer, has recently received a grant of $406 million from the United States. This move comes amidst fears that the incoming President, Donald Trump, could repeal a legislation encouraging U.S. chip production through subsidies, which also applies to foreign entities.
Rather than using subsidies, Trump has indicated his preference for tariffs to foster domestic chip manufacturing. He believes that tariffs on imported chips would motivate corporations to shift production to the U.S., eliminating the requirement for government expenditure.
The U.S. Commerce Department revealed on Tuesday that the funds allocated to GlobalWafers’ projects in Texas and Missouri would kickstart the first large-scale U.S. production of 300-mm wafers for advanced semiconductors. It will also boost the production of silicon-on-insulator wafers.
Wafers, thin silicon slices, serve as the foundation for semiconductors. They undergo a process of layering and etching to create circuits for chips utilized in AI, 5G, and computing technologies. The quality of these wafers is critical to the performance of the chips.
The U.S. Secretary of Commerce, Gina Raimondo, emphasized the significance of the semiconductor wafers that will be produced in the U.S. as a result of this investment in GlobalWafers. She said these advanced chips would enable the U.S. to outshine and outperform the rest of the world.
Additionally, the subsidy will back nearly $4 billion in investments by GlobalWafers in both states. This will facilitate the construction of new wafer manufacturing facilities and create 1,700 construction and 880 manufacturing jobs, as per the department.
The CHIPS Act aims to strengthen U.S. chip manufacturing by providing subsidies, grants, and incentives to companies, including foreign manufacturers like GlobalWafers, for investing in U.S. semiconductor production. The act has received mixed reviews domestically. While supporters assert the necessity of the act in enhancing U.S. chip production, reducing dependency on foreign supply chains, and safeguarding national security, critics view it as undue government spending favoring large corporations and question its efficacy.
GlobalWafers plans to establish and expand facilities in Sherman, Texas, for the production of wafers for leading-edge, mature-node, and memory chips. Moreover, a new facility in St. Peters, Missouri, is to be established for producing wafers for defense and aerospace applications.
Five major companies, including GlobalWafers, control over 80% of the global 300-mm silicon wafer market. Approximately 90% of silicon wafers are manufactured in East Asia.
