That binding contract, following a preliminary agreement announced in April, is the first major funding to be completed under the $52.7 billion program created by the US in 2022.

In April, TSMC (Taiwan’s No. 1 contract chipmaker) agreed to expand its planned investment by $25 billion to $65 billion and add a third factory in Arizona in 2030.

This Taiwanese company will produce chips using the world’s most advanced 2-nanometer process at its second factory in Arizona, which is expected to start in 2028.

“When we started, a lot of naysayers said that maybe TSMC would make 5 or 6 nanometer chips in the US In fact, they would make their most advanced chips in the US,” Commerce Secretary Gina Raimondo said in an interview

The funding for TSMC also includes $5 billion in US government loans at low interest rates.

TSMC agreed to forgo share buybacks for five years, except in certain circumstances, and to share excess profits with the US government under an “overwhelming benefit-sharing agreement”.

CC

In 2022, the US Congress passed the Chips and Science Act to promote domestic semiconductor production, which Ms.

“It doesn’t happen naturally… We had to convince TSMC to expand chip production. The market doesn’t pride itself on national security,” said Ms.

In addition, the US Department of Commerce allocated USD 36 billion for other chip projects, including USD 6.4 billion to Texas-based Samsung (the world’s number 1 memory chip maker), USD 8.5 billion to Intel and USD 6.1 billion to

Last week, Reuters reported that the US Department of Commerce had asked TSMC to stop supplying advanced chips to Chinese customers.

“Investing in TSMC to expand chip production in the US is offensive. Defense ensures that TSMC or any other company does not sell our most sophisticated technology to China and violate the measures that control our exports,” said Gina Raimondo and

“We take national security seriously and consider any potential issues, whether related to the companies we sponsor or not,” she added.

In October, research company TechInsights (Canada) discovered that Huawei’s Ascend 910B AI processor contains chips manufactured by TSMC.

Analysts say the TSMC incident has shed light on possible loopholes in US sanctions and China’s ongoing efforts to gain access to advanced chip manufacturing technology.

“The US’s long-term sanctions on China’s semiconductor industry have proven to be flawed,” said Arisa Liu, director at the Taiwan Institute for Economic Research.

The discovery sparked a scramble to find an explanation for what happened.

TSMC notified the US government and Taiwanese authorities about the incident.

Huawei said it did not “manufacture any chips by TSMC after implementing the revisions made by the US Department of Commerce to the foreign direct product regulations targeting Huawei in 2020”.

For now, there are still more questions than answers.

It is uncertain whether the TSMC-manufactured chips TechInsights discovered were included in Huawei hardware by the same customer.

Whether Huawei has direct access to TSMC’s advanced chip-making capabilities, or through indirect channels, it shows that the US has broken tight restrictions targeting the Chinese tech giant, according to analysis.

TechInsights’ findings were largely not reported in official media in China, although some social media accounts translated and cited foreign media reports.

Xiamen Sophgo Technologies (China) recently ordered TSMC to produce hundreds of thousands of chips with an identical design to a Huawei product.

Xiamen Sophgo Technologies was founded and partially owned by Micree Zhan, CEO of Bitmain, a Chinese company specializing in the production of computers for cryptocurrency mining and processors for AI systems.

Xiamen Sophgo Technologies claims it has never entered into any direct or indirect business relationship with Huawei and its business has never violated any US export control laws.

According to industry insiders, the above incident shows that China still has problems in the production of advanced chips and that it is difficult to make progress in this area without foreign technology or tools such as chip photolithography machines from ASML.

ASML (Netherlands) is the world’s number 1 supplier of chip manufacturing equipment.

ASML sells to Intel, Samsung and TSMC machines that help produce 1-nanometer chips

ASML has begun selling its next generation of advanced ultraviolet lithography presses.

TSMC and Samsung Foundry are the world’s two largest and second largest contract chip manufacturers, respectively.

Smaller size means more transistors can be fitted into an integrated circuit.

This is when EUV machines come into play.

The next generation of ultra-advanced EUV machines has begun shipping through ASML.

After pledging to regain its lead in chip manufacturing by 2025 from TSMC and Samsung Foundry, Intel is the first company to buy a new EUV high-NA machine from ASML worth $400 million, which increases the aperture number (NA

While the first generation of EUV machines helped foundries achieve 7-nanometer processes, high-NA EUV machines will take chip production down to 1-nanometer processes and below.

Intel has pre-ordered 11 EUV high-NA machines, including the first one already installed by ASML.

Intel plans to use EUV high-NA machines to help them catch up to TSMC and Samsung Foundry.

Samsung Foundry is expected to receive the first high-NA machine from ASML in early 2025.

Intel continues to face low production rates, losses and falling stock prices.

SMIC is China’s No. 1 contract chipmaker, the third largest in the world after TSMC and Samsung Foundry.

However, SMIC is not allowed to buy even the first generation EUV machines due to US sanctions.