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

Taiwan Semiconductor Manufacturing Company Ltd 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 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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