U.S. finalizes $6.6 billion chips award for TSMC ahead of Trump return

The U.S. Commerce Department said Friday it has finalized a $6.6 billion government subsidy for Taiwan Semiconductor Manufacturing Co's U.S. unit for semiconductor production in Phoenix, Arizona.

The binding contract — after a preliminary agreement announced in April — is the first major award to be completed under the $52.7 billion program created in 2022.

It comes just weeks before President-elect Donald Trump, who criticized the program, takes office.

In April, TSMC agreed to expand its planned investment by $25 billion to $65 billion and to add a third Arizona fab by 2030.

The Taiwanese company will produce the world's most advanced 2 nanometer technology at its second Arizona fab expected to begin production in 2028. TSMC also agreed to use its most advanced chip manufacturing technology called "A16" in Arizona.

"When we started this there were a lot of naysayers who said maybe TSMC will do 5 or 6 nanometer in the United States," Commerce Secretary Gina Raimondo said in an interview. "Actually they are doing their most sophisticated chips in the United States."

The TSMC award also includes up to $5 billion in low-cost government loans.

Under the agreement, TSMC will receive cash as it meets project milestones. Commerce expects to release at least $1 billion to TSMC by year end, a senior official told reporters.

TSMC agreed to forgo stock buybacks for five years - subject to some exceptions - and share any excess profits with the U.S. government under an "upside sharing agreement."

TSMC CEO C.C. Wei said in a statement the deal "helps us to accelerate the development of the most advanced semiconductor manufacturing technology available in the U.S."

Congress in 2022 approved the Chips and Science Act to boost domestic