The Independent View: Biden Administration Signs First Deal with Chipmaker to Build Plants in U.S.

The Biden Administration announced today, it has Signed the First Deal with a Major Chipmaker to build Factories in the U.S. using Funds from the 2022 CHIPS and Science Act.

The Final Deal with Taiwan Semiconductor Manufacturing Co. will spur the building of Three Fabrication Plants, or Fabs, in Phoenix, the Administration said. TSMC, the World’s Largest Producer of Chips, said it will spend $65 billion on the Arizona Fabs. TSMC could get $6.6 billion in CHIPS Act Grants and billions more in Tax Credits and Loans.

Several other Preliminary Deals with Chipmakers have yet to be Finalized, including One with Micron Technology to build up to Four Fabs in the town of Clay. Micron has Delayed the Start of Construction until at least November 2025.

Biden announced a Tentative Deal with Micron in April, during a Visit to Syracuse, New York. Under that Agreement, Micron could receive up to $4.6 billion in CHIPS Act Grants, and more than $11 billion in Tax Credits to build the First Two Fabs in Clay.

U.S. Commerce Secretary Gina Raimondo (D), in a Visit to Central New York in September, said She expected the Micron Deal to be Signed by the End of 2024.

The Biden Administration is racing to get the Deals done before Trump assumes the Presidency again in January. Trump has Criticized the CHIPS Act as “So Bad” and House Speaker Mike Johnson (R-LA, 4th District) in Syracuse last month, that Congress could Repeal or make substantial Changes to the Law and its Implementation.

The 2022 CHIPS Act, set aside up to $52 billion for New Chip Manufacturing Plants in the U.S. Proponents of the Law say American’s National Security depends upon Controlling the Production of Computer Chips, that Power everything from Cell Phones to Military Fighter Jets.

The money for Micron, TSMC, and other Chipmakers, isn’t paid Upfront. The Companies have to meet certain Construction and Hiring Thresholds to tap into the Grants, loans and Tax Credits.

“Today’s announcement is among the most critical milestones yet in the implementation of the bipartisan CHIPS & Science Act, and demonstrates how we are ensuring that the progress made to date will continue to unfold in the coming years, benefitting communities all across the country,” Biden said in a Statement.