JULYASIA BUSINESS OUTLOOK8TAIWAN'S GLOBALWAFERS TO MANUFACTURE SILICON WAFERS IN USATRUMP'S COMMENTS SEND TSMC STOCK ON A DECLINE SPREEThe U.S. Commerce Department announced plans to award Taiwan's GlobalWafers up to $400 million in government grants to significantly increase the production of silicon wafers in the United States. The funds will support projects in Texas and Missouri, aiming to establish the first U.S. production of 300-mm wafers for advanced semiconductors and expand production of silicon-on-insulator wafers.This initiative is part of the Biden administration's strategy to bolster the semiconductor supply chain in the U.S. by reducing dependence on foreign sources. The planned subsidy will support GlobalWafers' $4 billion investment in constructing new wafer manufacturing facilities, creating 1,700 construction jobs and 880 manufacturing jobs.Commerce Secretary Gina Raimondo emphasized the importance of GlobalWafers' role in strengthening the U.S. semiconductor supply chain by providing a domestic source of silicon wafers, which are essential for advanced chips. GlobalWafers Chairwoman and CEO Doris Hsu expressed gratitude for the U.S. government's support, highlighting the company's pivotal position in the U.S. semiconductor supply chain.Currently, GlobalWafers, along with four other major companies, controls over 80 percent of the global 300mm silicon wafer manufacturing market, with about 90 percent of silicon wafers produced in East Asia. The subsidy will facilitate the construction and expansion of facilities in Sherman, Texas, for wafers used in leading-edge, mature-node, and memory chips, and in St. Peters, Missouri, for wafers used in defense and aerospace chips. Taiwan should pay the United States for its defence as it does not give the country anything, U.S. Republican presidential candidate Donald Trump said, sending shares of Taiwanese chip manufacturer TSMC down on Wednesday."I know the people very well, respect them greatly. They did take about 100 per cent of our chip business. I think, Taiwan should pay us for defence," Trump said in interview with Bloomberg Businessweek on June 25 but published on Tuesday. "You know, we're no different than an insurance company. Taiwan doesn't give us anything."The U.S. is Taiwan's most important international supporter and arms supplier, but there is no formal defence agreement. The U.S. is however bound by law to provide Taiwan with the means to defend itself.U.S. President Joe Biden has upset the Chinese government with comments that appeared to suggest the U.S. would defend Taiwan if it were attacked, a deviation from a long-held U.S. position of "strategic ambiguity".Washington and Taipei have had no official diplomatic or military relationship since 1979, when the U.S. switched recognition to Beijing. There was no immediate reaction from Taiwan's government, nor TSMC which is currently in its quiet period ahead of its second quarter earnings report on Thursday.Shares in Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker and a major Apple and Nvidia supplier, fell more than 2 per cent on Wednesday morning. The broader market was down around 0.4 per cent. TSMC is spending billions building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it says most manufacturing will remain in Taiwan. NEWSROOM
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