In August 2022, the Biden administration introduced the CHIPS Act, which aims to promote the reshoring of chip manufacturing in the United States. To this end, it does not hesitate to spend 52.7 billion US dollars to subsidize and support enterprises that go to the United States to build factories. It is under such circumstances that Samsung Electronics and TSMC have successively gone to the United States to build factories. However, after TSMC really began to invest in Arizona and other plans to build factories, the subsidies promised by the United States have not arrived.
Not only that, but in fact, if you look closely at the content of the CHIPS Act, you will find that there are many risks hidden in it. For example, it stipulates that if the profit obtained by the company exceeds a certain amount, it must share the profit with the US government. And the share of profits will not exceed 75% of the subsidy.
There are not only concessions, but also some additional restrictions, such as not being able to build a factory in China, and submitting detailed financial reports. What's even more infuriating is that when TSMC and Samsung Electronics didn't get the subsidy for a long time, Intel actually took the lead in getting the subsidy.
This is a big thunderbolt for TSMC, so TSMC's plan to build a factory in the United States has to be postponed. But after the postponement of the plan to build a factory in the United States, TSMC did not stop its pace. In addition to Taiwan, TSMC also went to Kumamoto Prefecture in Japan to build a factory.
In February this year, TSMC held an opening ceremony for its first factory in Kumamoto Prefecture, Japan. In addition, it has decided to continue to invest in the construction of a second factory in Kumamoto Prefecture, which both TSMC and the Japanese government attach great importance to, and the Japanese side believes that this is an important opportunity for the Japanese semiconductor industry.
Moreover, starting in the fourth quarter of 2023, TSMC's advanced process production efficiency has risen sharply, and the revenue of 3nm process nodes has risen directly to 15%, compared to only 6%. In addition, the capacity utilization rate of 4nm and 5nm processes is as high as 90%, which shows that TSMC's position in the rivers and lakes is still very solid.
So in this big gamble with the United States, TSMC seems to have won in the end. On April 8, TSMC announced that it would invest in the construction of a third factory in Arizona, USA. It can probably be inferred from this that the cooperation between TSMC and the United States should be further promoted.
Taiwan's United Daily News also reported on the matter on April 9 and said that TSMC should be able to receive about $6.6 billion in subsidies and up to $5 billion in loans. Therefore, judging from the final result, TSMC has generally pushed forward whether it is building factories in the United States or Japan.
On the contrary, on SMIC's side, TSMC's headwind turnaround will certainly bring certain pressure and bring additional challenges to SMIC. After all, when TSMC gradually expands its scale, it will naturally seize SMIC's market share. For example, TSMC's expanded 28nm chip factory in Nanjing, the 28nm chips it produces are mainly for the mainland market.
In such a situation, the pressure on SMIC is naturally conceivable. So far, SMIC still needs to strive to catch up with the technological level of the world's mainstream semiconductor giants. However, it is more gratifying that many domestic enterprises are now inclined to use domestic substitution for imports, so that they can get rid of dependence and control as soon as possible.
In fact, this can be regarded as indirectly ensuring SMIC's market fundamentals, and if there is a market, there will be confidence. As the world's largest semiconductor market, China is also one of the driving forces and capital for SMIC's sustainable development. It is hoped that SMIC can break through the technical bottleneck as soon as possible and occupy a place in the international semiconductor industry.
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