What if Taiwan Semiconductor Doesn’t Want the $53 Billion Offer from Biden’s CHIPS Act?

Taiwan Semiconductor (TSMC), a chip-manufacturing giant in Taiwan, is concerned about using money from the CHIPS Act — a budget-busting initiative by President Biden to marry Big Government with Big Tech — for a long-planned fabrication facility in Arizona.

The Wall Street Journal reports that the Biden Administration and chip makers are “in uncharted terrain” with taxpayer subsidies of up to $53 Billion for chip fabs “as the U.S. embarks on an industrial policy experiment”.

But TSMC Chairman Mark Liu said to industry leaders at a conference in Taiwan last month, “Some of the conditions [in the CHIPS Act] are unacceptable and we aim to mitigate any negative impact from these and will continue discussions with the U.S. government.”

The New York Times reported in February that “internal doubts” are growing at the Taiwanese chips maker about its U.S. plant due to the “high costs and management challenges demonstrating how difficult it is for a company to move one of the most complex manufacturing processes to another country.

There was no doubt in my mind about the investment made by TSMC, even though the U.S. taxpayers paid up to $15 billion for this Arizona facility.

Journal reports that the Journal’s main sticking point is Washington’s “demands” for access to TSMC operations and books. The Journal reports that recipients of CHIPS funds exceeding $150 million are required to pay back any profits to the U.S. Treasury.

I would also add that the requirements of today are just today’s demands. Like in 1984, the Party’s requirements today may not be the same as those of tomorrow.

The progressive government has rewritten an old piece of wisdom. Britons used to warn that if you don’t pay the Danegeld, the Dane will never leave.

Viking* raiders often gave English villagers a choice when they arrived on English shores: pay them their due – the Danegeld – or be prepared to fight with experienced warriors. If you fail to pay up, your men will be killed, your wives raped and your village burnt. You’d better bet they’d return next season to get another taste of the sweet Danegeld.

Washington is not like the crude Vikings. Its route to greater power is more subtle and sneaky. Washington is able to dangle money in front of everyone’s face, and I mean everyone. Local schools, state transportation departments, foreign tech giants, colleges, and contractors of all sizes.

“Take the money! It’s free!”

Once you have the Fed-geld you will never be able to get rid of them. Money is never given away for free. The money always comes with conditions, mandates, and paperwork. In the 1950s, a seemingly noble initiative to advance American Science by funding university labs turned into a government order that men could use women’s bathrooms.

So all I can say to the good folks in charge of Taiwan Semi: Good job looking this gift horse in the mouth. But as much as we need your technology built on our shores, my advice to you would be to take a pass.