Connect with us

AMERICA

Biden finalizes $6.6bn CHIPS Act grant to TSMC ahead of Trump administration

Published

on

The Biden administration has finalized a $6.6 billion CHIPS Act grant for Taiwan Semiconductor Manufacturing Co. (TSMC), just two months before President-elect Donald Trump takes office.

Senior administration officials reported that the grant funds will be disbursed in phases as TSMC achieves project milestones, with at least $1 billion expected to be released by year’s end.

As part of this investment, TSMC will manufacture 3-nanometer, 2-nanometer, and A16 chips at three new factories in Arizona, bringing the company’s total U.S. investment to $65 billion. The first Arizona facility will also produce 4nm and 5nm chips, with high-volume production slated to begin in early 2025. The second and third fabs are set to commence production in 2028 and by the end of the decade, respectively.

Nanometer technology refers to the distance between transistors on a chip, with a smaller number typically indicating a more advanced and powerful chip.

“For the first time, we can say that we will be making these breakthrough chips in the U.S.,” U.S. Commerce Secretary Gina Raimondo stated in a Thursday briefing.

TSMC has also confirmed that yield rates—a key metric of chip production efficiency—are as strong in Arizona as they are in Taiwan. “That is an incredible achievement,” Raimondo remarked, highlighting the challenge and significance of maintaining such standards in the U.S.

In addition to the $6.6 billion grant, TSMC will receive a $5 billion loan and qualify for an investment tax credit of up to 25% of capital expenditures.

The Taiwanese company is the second-largest beneficiary of the CHIPS Act after Intel, which received an $8.5 billion grant. Samsung of South Korea ranks third, securing $6.4 billion in funding.

The Biden administration has announced preliminary specifications for more than $36 billion of the $39 billion CHIPS Act manufacturing fund. TSMC is only the second project to reach final terms, following Polar Semiconductors, a U.S.-based semiconductor manufacturer awarded $123 million.

President-elect Trump has raised concerns about the future of the CHIPS Act, which is aimed at boosting semiconductor manufacturing within the U.S.. He has criticized the deal, calling it “very bad” and proposing tariffs as a tool to attract chip manufacturing back to the U.S.

A senior administration official told Nikkei Asia that final agreements leave “little room” for the incoming administration to alter terms, noting, “It’s a binding contract. As long as TSMC meets the milestones, the government is committed to moving forward.”

White House National Economic Adviser Lael Brainard, who co-chairs the CHIPS Implementation Steering Council, shared that additional grants are expected in the coming months. “Over the next two months, the Department of Commerce will finalize more awards, ensuring that the progress continues through the decade,” Brainard stated in Thursday’s briefing.

AMERICA

Trump to announce 25% tariffs on steel and aluminium

Published

on

US President Donald Trump announced on Monday that he would impose a 25 percent tariff on all steel and aluminum imports, adding that he could detail his plan to impose reciprocal tariffs the next day.

“There will be a 25 percent tariff on every steel coming into the United States, a 25 percent tariff on aluminum,” Trump told reporters aboard Air Force One on his way to New Orleans for the Super Bowl on Sunday.

Trump did not specify when these new taxes would take effect. But Trump said the new tariffs would apply to all countries, including Canada and Mexico, which were exempted from US steel and aluminum tariffs when they signed the US-Mexico-Canada Agreement during his previous administration.

Trump said of Canada, “Why are we protecting another country? If we don’t allow them to produce cars… they can’t survive as a country,” he claimed.

The United States is maintaining the 25 percent steel and 10 percent aluminum tariffs on many countries that the first Trump administration imposed in 2018 under Section 232 of the Trade Expansion Act of 1962. Many trading partners have negotiated the lifting of these tariffs.

Doug Ford, Prime Minister of the Province of Ontario in Canada, said in a post on X on Sunday evening, “The next four years will be like this. Changing game rules and constant chaos put our economy at risk,” he said.

Trump also said on Sunday that he would impose reciprocal tariffs on trading partners in the coming days to match the taxes imposed by other countries. He said these tariffs would be announced on Tuesday or Wednesday and would take effect “almost immediately.”

Trump said, “If they are taxing us 130 percent and we are not buying anything from them, this will not stay like this. There will be reciprocity to every country,” he said.

Trump reiterated his plan on Friday, suggesting that the tariffs would replace a general tariff on all imports, a major reversal from his campaign proposal for a “basic” tariff of 10 to 20 percent on all imports.

The US applies the same tariffs for most countries, but individual US tariff rates vary depending on the product. Some tariff rates are as low as just 2.5 percent, such as on cars, while others, such as on clothing and footwear, are generally higher.

Continue Reading

AMERICA

Big Tech’s $300 billion AI spending spree set to reshape 2025

Published

on

The massive spending on artificial intelligence (AI) by Big Tech companies is set to continue in 2025, with Amazon leading the charge by planning over $100 billion in infrastructure investments this year.

According to the Financial Times (FT), spending by the four leading US technology companies surged by 63% last year, reaching historic levels. Executives are now pledging to accelerate investment in AI, dismissing concerns about the enormous sums being poured into the emerging technology.

Microsoft, Alphabet, Amazon, and Meta reported that their combined capital expenditure rose from $151 billion in 2023 to $246 billion in 2024. They forecast that spending could exceed $320 billion in 2025 as they compete to build data centers and equip them with custom chip clusters to maintain leadership in AI large language model research.

The scale of these spending targets, announced alongside fourth-quarter earnings, surprised the market and exacerbated a sell-off triggered in late January by the launch of an innovative and inexpensive AI model from Chinese startup DeepSeek.

Microsoft and Google’s parent company, Alphabet, saw $200 billion wiped off their combined market capitalization after reporting weaker-than-expected growth in their cloud computing divisions and sharp increases in capital expenditure. Google’s 8% drop on Wednesday marked its fifth-worst trading day in a decade.

According to the FT, Google has been criticized for its lack of transparency regarding the use and revenue of its Gemini chatbot, while companies remain hesitant to adopt Microsoft’s costly and clunky Copilot “agents” aimed at improving labor productivity.

DeepSeek’s claim that it had developed a reasoning model with capabilities similar to those of Google and OpenAI—but at a much lower cost and without relying on Nvidia’s most advanced graphics processing units—caused Nvidia’s stock to plunge 17%, wiping out $600 billion in value in a single day. However, the stock later partially recovered.

Despite these challenges, Big Tech executives remain optimistic. On Tuesday, Google CEO Sundar Pichai described the AI opportunity as “huge,” defending the company’s plan to spend $75 billion in 2025—a 42% increase from $53 billion last year.

Pichai also noted that DeepSeek’s innovations could stimulate demand by demonstrating how new techniques can make AI more affordable and spur additional areas of research.

“I will spend $80 billion to build Azure, and customers can trust Microsoft,” Microsoft CEO Satya Nadella said at Davos two weeks ago.

On Thursday, Amazon CEO Andy Jassy outpaced both Google and Microsoft, predicting that capital expenditures would exceed $100 billion this year, up from $77 billion in 2024 and more than double the $48 billion spent the year before. The vast majority of this spending will go toward data centers and servers for Amazon Web Services (AWS), which Jassy said was responding to “significant demand signals.”

Meta’s earnings were more positively received, with its shares soaring after Chairman Mark Zuckerberg pledged to invest “hundreds of billions of dollars” in AI on top of a $40 billion investment planned for 2024.

Spending among the “Magnificent Seven”—which includes Apple, Nvidia, and Tesla—dwarfs that of the rest of the S&P 500 in the US. According to Société Générale, the capital expenditure of these companies increased by 40% in 2024, compared to just 3.5% among the remaining 493 companies. Over the same period, profits for the elite group rose by a third, while those of the others grew by only 5%.

This spending spree is not limited to public companies, and neither DeepSeek nor fears of an AI bubble have slowed the flow of capital to Silicon Valley startups.

OpenAI’s Sam Altman has formed a partnership with SoftBank and Oracle to invest $100 billion in AI-related US infrastructure, potentially rising to half a trillion over time. Meanwhile, Japanese investor SoftBank is reportedly in talks to invest $25 billion in OpenAI at a valuation of $260 billion.

Continue Reading

AMERICA

Pentagon drafts plan for US troop withdrawal from Syria

Published

on

The Department of Defense is preparing plans to withdraw all US troops from Syria, two US defense officials told NBC on Tuesday.

The officials said President Donald Trump and officials close to him had recently expressed interest in withdrawing US troops from Syria, prompting Pentagon officials to begin preparing plans for a full withdrawal in 30, 60, or 90 days.

Trump’s new National Security Advisor, Mike Waltz, spent Friday at the US Central Command (CENTCOM) headquarters in Tampa, Florida, where he met with senior US military leaders and received a briefing on the Middle East, US defense officials said.

A White House official said the possible reduction of US forces in Syria was not the subject of the briefing or the purpose of Waltz’s visit.

“It’s good that NSA Waltz is visiting CENTCOM to get to know the whole region,” the White House official said, noting that Israeli Prime Minister Binyamin Netanyahu visited the White House on Tuesday and that King Abdullah of Jordan will visit Washington next week.

At a press conference in the Oval Office last Thursday, a reporter asked Trump about reports that he had informed the Israeli government about the withdrawal of US troops from Syria.

In response, Trump said, “I don’t know who said that. I mean, I don’t know who said it, but we’re going to make a decision on this. We do not enter Syria; we do not interfere in Syria. Syria is a trouble in itself. There is enough confusion there. They don’t need us meddling in everything,” he said.

In December, the Pentagon announced the deployment of about 2,000 troops to Syria, more than double the 900 or so the military has been saying for years.

Continue Reading

MOST READ

Turkey