In April, TSMC received $6.6 billion in direct CHIPS Act funding to support TSMC's more than $65 billion investment in three leading factories in Phoenix, Arizona, that will produce the world's most advanced semiconductors, the Commerce Department said . said.
These investments are critical to the Biden-Harris administration's mission to “strengthen economic and national security by ensuring a reliable domestic supply of chips that will support the future economy and support the AI boom and other fast-growing industries such as consumer electronics, the automotive sector, Internet of Things and high-performance computing,” the department said. And in particular, the funding will help America “maintain our competitive advantage” in artificial intelligence, the ministry said.
It probably wouldn't make sense to support TSMC to help the US “land the critical hardware manufacturing capabilities that underpin AI's deep language learning algorithms and inference techniques,” only to then restrict access to US-made technology. TSMC's Arizona factories are expected to support companies like Apple, Nvidia and Qualcomm and allow them to “compete effectively,” the Commerce Department said.
Currently, it is unclear where the U.S. investigation into TSMC will go and whether an adverse finding could potentially impact TSMC's CHIPS funding.
Last fall, however, the Commerce Department published a final rule intended to “prevent CHIPS funds from being used to directly or indirectly benefit foreign countries of concern,” such as China.
If the US were to suspect that TSMC was supporting Huawei's production of AI chips, the company could be seen as avoiding the CHIPS guardrails that prohibit TSMC from “knowingly engaging in joint research or technology licensing efforts with a foreign entity of interest relating to a technology or product that raises national security concerns.”
Violating this “technology clawback” provision of the final rule risks having “the entire amount” of CHIPS Act funding “recoupled” by the Department of Commerce. That outcome seems unlikely, however, as TSMC has received more funding than any other recipient aside from Intel.
The Commerce Department declined Ars' request to comment on whether TSMC's CHIPS Act funding could be affected by their reported investigation.
