FILE PHOTO: Semiconductor chips are seen on a printed circuit board in this illustration picture taken February 17, 2023. REUTERS/Florence Lo/File Photo
WASHINGTON (Reuters) -The U.S. Commerce Department said on Tuesday it has finalized $406 million in government grants to Taiwan's GlobalWafers to significantly increase production of silicon wafers in the United States.
The funds for projects in Texas and Missouri will establish the first high-volume U.S. production of 300-mm wafers for advanced semiconductors and expand production of silicon-on-insulator wafers, the Commerce Department said.
The wafers are a crucial component of advanced semiconductors and part of the Biden administration's efforts to boost the domestic chips supply chain.
The subsidy will support nearly $4 billion in investments by GlobalWafers in both states to construct new wafer manufacturing facilities and create 1,700 construction and 880 manufacturing jobs.
GlobalWafers CEO Doris Hsu told reporters in Taiwan on a conference call that the company saw localization as having its advantages at a time when the global chip supply chain faced tariffs. "In countries with high demand for silicon wafers, local supply will be prioritized and supported by local customers."
When asked whether the company foresaw potential uncertainties with U.S. CHIPS Act grants with President-elect Donald Trump set to take office next month, she said that it would wait to see if he made any new decisions.
"As of now, besides the Act, there is also a contract that is legally protected...Since the CHIPS Act was initially proposed during Trump's first term, there is a higher chance that this Act will continue to be implemented."
But the company is unable to source everything from the U.S. for its manufacturing sites in the country and will need to import some raw materials and consumables, she said. This, and Trump's proposed tariffs were creating uncertainty, she added.
"Some customers are already asking for quotes that include shipping and tariffs, but we can't provide these because the tariffs are uncertain," she said. GlobalWafers operates 18 factories across nine countries.
GlobalWafers said in 2022 it would build a $5 billion plant in Texas to make 300-mm silicon wafers used in semiconductors, switching from a defunct plan to invest in Germany.
Currently, five major companies including GlobalWafers control more than 80% of the global 300-mm silicon wafer manufacturing market and about 90% of silicon wafers are produced in east Asia.
GlobalWafers plans to build and expand facilities in Sherman, Texas, to produce wafers used to manufacture leading-edge, mature-node, and memory chips and a new facility in St. Peters, Missouri, for wafers used for defense and aerospace chips.
The Commerce Department has been racing to finalize awards under the 2022 $52.7 billion 2022 CHIPS and Science Act semiconductor manufacturing and research subsidy program before Trump takes office on Jan. 20.
(Reporting by David Shepardson. Additional reporting by Wen-Yee Lee in Taipei. Editing by Lincoln Feast and Mark Potter)
