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TSMC Seeks $15B In Subsidies, Wants To Negotiate Certain Terms Of US Chips Act Like Profit Sharing

  • Taiwan Semiconductor Manufacturing Company Ltd (NYSE: TSM) negotiated some of the terms of the U.S. Chips Act as it seeks $15 billion in subsidies.

  • TSMC, which proposes to invest $40 billion in two chip factories in Arizona, flagged rules that could require it to share profits from the factories and provide detailed information about operations, the Wall Street Journal reports.

  • TSMC Chairman Mark Liu has said the U.S. terms could dissuade chip makers from working towards the country's chip-manufacturing capacity.

  • A Commerce Department official said the department would protect confidential business information and expect profit-sharing if a recipient's cash flow significantly exceeds projections.

  • TSMC expects to get tax credits of $7 billion - $8 billion under provisions of the Chips Act.

  • TSMC eyed $6 billion - $7 billion in grants for the two Arizona plants.

  • TSMC expects the economics of the Arizona project to fail lest government caps its potential profit. TSMC also sees problems calculating the gain of one or two factories in a global manufacturing operation.

  • The government's demands for extensive access to TSMC's books and operations are another bone of contention.

  • As a contract chip maker for clients like Apple Inc (NASDAQ: AAPL), TSMC tightly guards its chip-making recipes.

  • TSMC founder Morris Chang has said it might cost at least 50% more to make chips in Arizona compared with Taiwan, further elevating the subsidies' importance.

  • Price Action: TSM shares traded lower by 2.09% at $86.30 premarket on the last check Wednesday.

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This article TSMC Seeks $15B In Subsidies, Wants To Negotiate Certain Terms Of US Chips Act Like Profit Sharing originally appeared on Benzinga.com

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