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To Washington's relief, GlobalWafers to spend $5 billion on Texas plant

Cash had been burning a hole in company's pocket after deal to buy Siltronic fell through

Taiwan's GlobalWafers announced on Monday a new use for the $5 billion it first earmarked for a purchase of Germany's Siltronics: building a 300-millimeter semiconductor wafer plant in the US state of Texas.

Construction on the facility – which will eventually span 3.2 million square feet – is expected to commence later this year, with chip production commencing by 2025. The plant will sit in the city of Sherman, near the Texas-Oklahoma border, where it is slated to bring in 1,500 jobs as production climbs towards 1.2 million wafers per month.

GlobalWafers is the world's third largest producer of silicon wafers and Sherman is already home to its subsidiary, GlobiTech.

According to Texas governor Greg Abbott, the company is receiving a grant of $15 million and was offered an additional $10,000 bonus for creating jobs for US veterans.

The initial investment for the new plant will start at around $2 billion with a total reaching $5 billion as the project produces cashflow, according to Nikkei Asia citing Abbott.

"This 300-millimeter greenfield investment is consistent with the Company's announcement on February 6th of this year of brownfield and greenfield expansions totaling 100 billion NTD [US 3.4 billion]" explained GlobalWafers in its canned statement.

The expansions were announced as a Plan B after German regulators dragged their feet on approval of GlobalWafers' takeover of Siltronic. The offer expired before regulators issued an opinion about whether or not it should be allowed to proceed.

The loss of the Siltronic deal is certainly the United States' gain as GlobalWafers sees its new plant enabling it to address all the new chip factories being built stateside. The US therefore gains two parts of the silicon supply chain, which aligns nicely with Washington's desire to bring semiconductor manufacturing onshore.

Within GlobalWafers' canned statement, US secretary of commerce Gina Raimondo celebrated the new facility before issuing a stark warning about the need for domestic production.

"We are at a make-or-break moment to expand domestic semiconductor production," said Raimondo. "Semiconductor firms need to make investment decisions by the Fall to meet the enormous increased demand for chips." GlobalWafers has claimed the semiconductor plant will be the first of its kind built in the US in over twenty years. According to Reuters, Raimondo said GlobalWafers' CEO told her the firm's Texas investment was contingent on Congress approving the funding.

"300-millimeter silicon wafers are the starting material for all advanced semiconductor fabrication sites (or fabs), including recently announced United States (US) expansions by GlobalFoundries, Intel, Samsung, Texas Instruments and TSMC," said the Taiwanese chipmaker. "Most of these wafers are currently manufactured in Asia, forcing the US semiconductor industry to highly rely on imported silicon wafers."

Last November Samsung announced it was erecting a semiconductor manufacturing facility in Taylor, Texas – a 30-minute drive from its Austin plant that gained notoriety from a forced weather-related shutdown in February.

This week Raimondo urged Congress to approve $52 billion in funding for chipmaking expansion, calling the passing of the CHIPS Act necessary for national security. ®

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