TSMC’s Deal With Arizona Continues to be a Secret
Taiwan Semiconductor Manufacturing Company's TPE:2330,NYSE:TSM dealings with the state of Arizona over a planned fab continued to be shrouded in secrecy after the Arizona Commerce Authority refused to release documents to Wccftech in response to a Freedom of Information request.
In response to Wccftech's request, an Arizona Commerce Authority spokesperson said that any documents related to perks, benefits or subsidies provided by Arizona related to TSMC's planned fab could not be released until the project is completed. This is believed to mean when the facility has finished construction and is operational.
All this comes as TSMC scores major subsidies from Washington in order to start the construction of the facility. According to a report from Bloomberg, TSMC is hoping that the US will fund the difference in costs of manufacturing semiconductors in America versus Taiwan.
“Subsidies will be a key factor in TSMC’s decision to set up a fab in the US,” TSMC chairman Mark Liu is quoted as saying at the company's recent shareholders' meeting. “We are still talking to the US government. Our request is that the state and federal governments together make up for the cost gap between the US and Taiwan.”
The exact nature and value of the subsidies potentially provided by the federal government have not been released.
TSMC has also announced that it has picked a site for the facility in Arizona, but the exact location has not been announced.
Heading to Washington
As Wccftech recently reported, the semiconductor industry, including TSMC, has been making a big push in DC, lobbying for support for the industry with a wishlist of $37 billion in grants and subsidies.
And these requests have been well-received by lawmakers, with bi-partisan support. According to the Wall Street Journal, the first bill to support the industry would establish a $10 billion federal program that matches state and local incentives for the construction of semiconductor factories. Both foreign and US firms would be eligible for the funds.
The bill would also allocate $750 million in funding to create a consortium with foreign governments to promote transparency in chip supply chains.
Arizona Commerce Authority's Culture of Secrecy
Arizona has long been criticized for its lack of transparency. According to a report from the Coalition for Integrity, Arizona ranks as one of the most corrupt states in the US getting a bottom score of 28% for integrity.
The Arizona Commerce Authority isn't subject to the same transparency and reporting requirements of most government departments as its a privatized quasi-independent agency. In 2011 the state effectively privatized its Department of Commerce turning it into the Arizona Commerce Authority, which lacks the same oversight as a fully-public department of the state government.
Arizona's Public Interest Research Group has criticized the Arizona Commerce Authority’s transparency practices, particularly with regard to the use of taxpayer money for subsidies and incentives directed towards companies.
"Unfortunately, Arizona law prohibits a lot of information about what companies are receiving taxpayer dollars and how much money these companies are receiving from being released," Serena Unrein, from the Arizona PIRG is quoted by the Arizona Capitol Times as saying in 2012.
It should be noted that TSMC's language right now is limited to stating that it has a "willingness" to open a facility in the US. It has not signed a commitment.
TSMC was down during the trading day in Taipei, closing at 320 NTD ($10). It's ADR in New York was up 1% in pre-trading and is set to start the day at $57.
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