Apple lobbying pays off in Senate with TSMC chip-making vote

Ben Lovejoy's "US chip subsidy bill ‘vital to TSMC Arizona plant’ passes new Senate vote" posted Wednesday on 9to5Mac:

A $52B US chip subsidy bill has convincingly passed a new Senate vote, with 64 in favor and just 34 opposed. Apple has said that the subsidy is ‘vital’ to the construction of a TSMC chip-making plant in Arizona, which is expected to make chips for the Cupertino company.

The latest vote had been described as a test of whether there was sufficient backing to include additional funding for science and defense research...

Despite bipartisan support, politicians were having difficulties agreeing on the details, with some expressing concerns that the bill may not pass at all. The proposed subsidy has gone through various iterations, with different politicians wanting to add in funding for other issues, and it is this secondary funding which has caused controversy.

The WSJ reports that the latest version of the bill was easily passed, and is likely to pave the way for the inclusion of additional science and defense spending.

My take: That anything can get passed in the Senate is news.

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9 Comments

    • Rodney Avilla said:
      Tax incentives are given based on calculations that by stimulating the economy via businesses, the tax return (income tax from increased employment, sales tax, etc) will at least cover the tax break amount. So it is an investment by the government.
      Socialism is a transfer of wealth from the haves to the have-nots. Tax receipts is at best 5-10 cents on the dollar. Not a very good investment from a tax standpoint. Some say giving to the poor is ‘investing in people’. Sounds good. Looking at a lot of socialistic countries; not so good.
      Personally, I do not like tax breaks to businesses, even when it brings in net tax receipts. I prefer that the market, thru supply and demand (as determined by people as opposed to a government committee) determine the success or demise of a business.

      2
      July 21, 2022
      • David Drinkwater said:
        That great, Rod, it by the time a chip gets to a consumer, no-one understands how much the fab costs.

        0
        July 23, 2022
  1. T R said:
    I don’t know the accuracy, but even taken as questions, they’re points to consider.

    0
    July 21, 2022
  2. Jonny T said:
    Sooner the better that TSMC and Apple can work together outside the reach of the CCP.

    5
    July 21, 2022
  3. Bart Yee said:
    It’s unlikely that Apple will have a purely exclusive option on all TSMC Arizona production output (at 3nm or 2nm processes) when the factory actually is built. Oh, Apple could pay for most of the production capacity but I’d think Qualcomm and others would get some portion (5-15%) of output.

    Would Intel consider buying some some capacity so as to improve their design and power efficiency with cutting edge processes that Intel hasn’t perfected yet and for the near future? Maybe but it’s a bad look.

    1
    July 21, 2022
    • Roger Schutte said:
      I don’t believe TSMC is putting their most advanced processes into the Arizona plant. And Intel will soon (if not already) be one of TSMC’s largest customers. They’ve placed many large orders for present and future leading processes.

      2
      July 21, 2022
      • Bart Yee said:
        From a few articles which discuss this, it appears TSMC will install equipment for current 5nm process in the Arizona fab. This makes sense for customers wanting proven, productive production lines for designs validated with 5nm already or those looking to migrate to faster, more power efficient process without breaking the bank on bleeding edge and constrained production capacity 3nm or below. US companies in particular can benefit from a more local supplier in addition to the political points scored for using domestic production.

        It’s interesting to note TSMC runs various and multiple fans in Taiwan, including much older but still profitable and in demand processes from 14 to 28nm. These are well known, well amortized systems that continue to supply the bulk of older general purpose chips to many industries like automotive, appliance, electronic control, automation, etc. where customized chips and cpu power is not required but building blocks design and lowest cost plus availability is highly desired and prized.

        0
        July 23, 2022
  4. Fabs use an incredible amount of water. Arizona has a major water shortage. Supposedly the TSMC plant will accumulate and then recycle most of their water. Looking at the levels in Lake Mead I grow concerned about a business that uses so much of something so scarce, fresh water.
    On some level Taiwan Semi has been quite content with simply building more fabs in Taiwan. The employee training and extended supplier networks are at their doorsteps. Finished product heads to Foxconn plants by air, no Pacific Ocean to cross. Foxconn plant in Wisconsin would need to grow, along with a supplier network. As Bart said, TSM produces chips for many firms. Apple’s 5nm (3nm?) demands will continue to be met by fabs in Taiwan for years.
    I’m skeptical about most government tax-breaks to profitable firms but consider the $52B worth it if we can nurture a more stable high tech economy in North America. Cheap when compared to the cost of a war between China & anyone.

    2
    July 23, 2022

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