US Finalizes $6.6B CHIPS Award to Taiwan
The Facts
The US Commerce Department announced Friday that it will award a $6.6B government subsidy to Taiwan Semiconductor Manufacturing Co. (TSMC) so it can continue producing semiconductors in Phoenix, Arizona.
This binding contract, which follows a preliminary agreement in April, also includes up to $5B in low-cost government loans for TSMC Arizona, which has agreed not to do stock buybacks — with some exceptions — for five years and to share excess profits with the US government.
The Spin
Democratic narrative
Republicans should remember that the CHIPS Act passed with bipartisan support and the benefits have been a boon to the US, especially Arizona — a state Trump just won in the presidential election. Droves of semiconductor companies are moving to Arizona because of CHIPS, and the US' relationship with Taiwan continues to blossom. Undoing CHIPS would reverse a lot of economic prosperity.
Republican narrative
Politicians, particularly Democrats, shouldn't be overestimating CHIPS' impact. The corporate welfare program the law created has yet to make a difference on the economy, considering much of what's happening with TSMC was agreed upon prior to the bill's passing. What's more, the success of TSMC is all but canceled out by the failure of the US-based company Intel. The US could get these deals done without handouts by loosening regulations and embracing free markets.
