TSMC and GlobalFoundries have reportedly finished negotiating their binding agreements with the US Department of Commerce regarding their CHIPS Act funding.

Citing people familiar with the matter, Bloomberg said that funding for both companies is roughly in line with the preliminary figures announced earlier in the year.

While the report noted that it was unclear when the agreements would be officially signed, in the wake of former and now President-elect Trump’s disparaging comments about the CHIPS Act in recent weeks, it’s thought that the Biden Administration will want to finalize the deals before the end of his term.

GlobalFoundries was one of the first companies to be awarded funding under the CHIPS and Science Act.

In February 2024, the Department of Commerce announced it would be awarding $1.5 billion to the chipmaker to support three projects: expanding the company’s existing Malta, New York, fab; constructing a new fab on the Malta campus for the production of chips for automotive, aerospace, defense and AI; and modernizing the company’s Trusted 200mm facility in Essex Junction, Vermont, creating the first US facility capable of high-volume manufacturing of next-generation gallium nitride (GaN) semiconductors.

Two months later, TSMC was awarded $11.6 billion in CHIPS Act funding, made up of $6.6 billion in grants and an additional $5 billion in loans. The chipmaker was already constructing two plants in Arizona to produce 4nm and 3nm semiconductors but under the terms of the deal, TSMC agreed to build a third fab in the state.

The $280 billion CHIPS and Science Act was approved by Congress in July 2022, with $52 billion of the overall funding package designated as subsidies for US semiconductor manufacturers. Funding from the act has also been earmarked for semiconductor R&D, growing a skilled semiconductor workforce, and incentives for the manufacturing of semiconductors and specialized tooling equipment.

However, in the run up to the election, Trump has criticized the CHIPS and Science Act, saying that the government should have levied tariffs on the semiconductor industry instead of handing out grants and loans to chip companies.

Prior to Tuesday’s vote, House Speaker Mike Johnson also said the Republican party “probably will” try to repeal the US CHIPS Act, a statement he later walked back on, claiming he meant to say the party would instead “further streamline and improve the primary purpose of the bill.”

Given his re-election, it now remains to be seen whether Trump will scrap the act altogether or simply change the bill “to eliminate its costly regulations and Green New Deal requirements,” which Johnson took umbrage with.

Republican lawmaker proposes SMIC facility search in wake of GlobalFoundries export breach

The news of GlobalFoundries finalizing its funding agreement comes in the same week it was announced the chipmaker had received a $500,000 fine from the Department of Commerce for shipping wafers valued at approximately $17.1 million to SJ Semiconductor (SJS), an affiliate of Semiconductor Manufacturing International Corp (SMIC) – China’s largest contract chipmaker.

GlobalFoundries was accused of not having the correct license to ship the wafers, however, it was noted by the US government that GlobalFoundries voluntarily disclosed the breach to the department, took “remedial measures” and cooperated with the investigation.

SMIC was added to the US Entity List in 2020 by then President Trump. However, rather than banning shipments outright to the company, exporters would still ship goods to SMIC, they would just need the appropriate license to do so.

Following news of the breach, Texan House Representative and chair of the House Foreign Affairs Committee, Michael McCaul, has called on the Commerce Department to conduct checks at SMIC facilities to see if the company is illegally manufacturing chips for Huawei.

Per a report from Reuters, McCaul has written to the Bureau of Industry and Security under secretary Alan Estevez, saying: "There is growing evidence that SMIC is violating US export control laws,” adding that if China was not willing to immediately agree to a “comprehensive audit of all SMIC facilities and its books… BIS should pause all existing licenses for SMIC."