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TSMC Wins $6.6 billion US Subsidy for Arizona Chip Production

A logo of taiwanese chip giant TSMC is seen at southern Taiwan science park in Tainan, Taiwan December 29, 2022.REUTERS/Ann Wang/File Photo Purchase Licensing Rights
A logo of taiwanese chip giant TSMC is seen at southern Taiwan science park in Tainan, Taiwan December 29, 2022.REUTERS/Ann Wang/File Photo Purchase Licensing Rights
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TSMC Wins $6.6 billion US Subsidy for Arizona Chip Production

A logo of taiwanese chip giant TSMC is seen at southern Taiwan science park in Tainan, Taiwan December 29, 2022.REUTERS/Ann Wang/File Photo Purchase Licensing Rights
A logo of taiwanese chip giant TSMC is seen at southern Taiwan science park in Tainan, Taiwan December 29, 2022.REUTERS/Ann Wang/File Photo Purchase Licensing Rights

The US Commerce Department said Monday it would award Taiwan Semiconductor Manufacturing Co's (TSMC) (2330.TW), opens new tab US unit a $6.6 billion subsidy for advanced semiconductor production in Phoenix, Arizona and up to $5 billion in low-cost government loans.

TSMC agreed to expand its planned investment by $25 billion to $65 billion and to add a third Arizona fab by 2030, Commerce said in announcing the preliminary award. The Taiwanese company will produce the world's most advanced 2 nanometer technology at its second Arizona fab expected to begin production in 2028, the department said, Reuters reported.

"These are the chips that underpin all artificial intelligence, and they are the chips that are necessary components for the technologies that we need to underpin our economy, but frankly, a 21st century military and national security apparatus," Commerce Secretary Gina Raimondo said in a statement.

TSMC, the world's largest contract chipmaker and a major supplier to Apple (AAPL.O), opens new tab and Nvidia (NVDA.O), opens new tab, had previously announced plans to invest $40 billion in Arizona. TSMC expects to begin high-volume production in its first US fab there by the first half of 2025, Commerce said.

The $65 billion-plus investment by TSMC is the largest foreign direct investment in a completely new project in US history, the department said.

Congress in 2022 approved the Chips and Science Act to boost domestic semiconductor output with $52.7 billion in research and manufacturing subsidies. Lawmakers also approved $75 billion in government loan authority.

TSMC Arizona has also committed to support the development of advanced packaging capabilities through partners in the US to allow customers to purchase advanced chips that are made entirely on US soil, the department said, adding 70% of TSMC customers were US companies.

TSMC CEO C.C. Wei said the company would help US tech firms "unleash their innovations by increasing capacity for leading-edge technology through TSMC Arizona."

Commerce expects the projects will create 6,000 direct manufacturing jobs and 20,000 construction jobs. The department said 14 direct TSMC suppliers plan to construct or expand US plants.

At full capacity, TSMC's three fabs in Arizona will manufacture tens of millions of leading-edge chips in 5G/6G smartphones, autonomous vehicles, and AI data center servers, the department said.

Through its Arizona fabs, TSMC will support key customers like Apple, Nvidia, Advanced Micro Devices (AMD.O), opens new tab and Qualcomm (QCOM.O), opens new tab "by addressing their leading-edge capacity demand, mitigating supply chain concerns, and enabling them to compete effectively in the ongoing digital transformation era," the department added.

Commerce last month announced $8.5 billion in grants and up to $11 billion in loans for Intel (INTC.O), opens new tab to subsidize leading-edge chip production from the same program.

The department is expected to unveil an award for South Korea's Samsung Electronics (005930.KS), opens new tab as soon as next week, sources said. Commerce declined to comment. Samsung did not respond immediately to a request for comment.

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Business

European Gasoline Heads to Asia as Iran War Sparks Supply Fears

Oil, gasoline, and diesel storage tanks in Carson, California (Reuters)
Oil, gasoline, and diesel storage tanks in Carson, California (Reuters)
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European Gasoline Heads to Asia as Iran War Sparks Supply Fears

Oil, gasoline, and diesel storage tanks in Carson, California (Reuters)
Oil, gasoline, and diesel storage tanks in Carson, California (Reuters)

European and US gasoline cargoes are heading to the Asia Pacific after Asian prices surged on tightening supply due to the US-Israeli war with Iran, according to trade sources and shipping data.

The war has disrupted crude and oil product shipments from the Middle East to Asia, causing Asian refineries to cut output and forcing fuel distributors to seek supply from as far as the United States and buy more Russian fuel.

The extra shipping costs will exacerbate already soaring fuel prices for consumers and businesses, said Reuters.

At least three gasoline cargoes totaling about 1.6 million barrels have loaded last week from Europe for Asia, according to traders ‌and ship tracking data ‌from Kpler, as companies including Vitol and TotalEnergies ship the ‌fuel ⁠to the East ⁠to cash in on better margins in Asia.

Vitol and TotalEnergies declined to comment. Earlier, Exxon Mobil booked US gasoline cargoes for Australia.

Europe typically only sends small parcels of gasoline to the East of Suez markets, while its key markets are the US, Latin America and West Africa.

Asian refiners' profits from making a barrel of gasoline from Brent crude are hovering near 2022 highs of about $37 a barrel over Brent crude last week versus $8 before the ⁠war.

"One key factor is refinery behavior under crude supply uncertainty. ‌As disruptions around the Strait of Hormuz increase feedstock ‌risk, some refiners are becoming more cautious about run rates or export commitments," Nithin Prakash, analyst at ‌consultancy Rystad Energy, said.

Even if inventories currently appear comfortable, lower refining throughput could tighten ‌the supply outlook and support gasoline margins, he said. Singapore inventories of light distillates, which include gasoline and naphtha, are about 6% higher than the same time last year, at 17.93 million barrels, LSEG data showed.

REGIONAL SUPPLY FALLS

Gasoline supply from within the region is falling as shipments from ‌top fuel exporter South Korea are expected to drop to between 5 million and 6 million barrels in March from a three-month ⁠average of about ⁠10 million barrels, preliminary Kpler and LSEG data showed.

China, another big supplier, has banned fuel exports to shore up its domestic market. Thailand and Vietnam have also restricted fuel exports. Traders are now pinning their hopes on Asia's second largest fuel exporter, India, which typically sends about 40% of its monthly shipments of between 7 million and 8 million barrels to the Middle East, to pivot to the East.

India typically sends about 22% of its gasoline to Asia, LSEG data showed. However, the country's gasoline exports have plummeted to about 5 million to 6 million barrels in March from around 12 million barrels last month, preliminary LSEG and Kpler data showed, as state-run Mangalore Refinery and Petrochemicals has temporarily suspended cargo loadings.

Vessel Load port Discharge Volume Load Charterer port (bbl) date Maui Ventspils Singapore 770,000 March 18 Vitol Metro Mistral Amsterdam Karachi 500,000 March 14 TotalEnergies ST Connaught Amsterdam Singapore 400,000 March 17.

Business

Gold Slides to Nearly 4-month Low

FILED - 02 February 2026, Bavaria, Munich: Gold bars lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa
FILED - 02 February 2026, Bavaria, Munich: Gold bars lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa
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Gold Slides to Nearly 4-month Low

FILED - 02 February 2026, Bavaria, Munich: Gold bars lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa
FILED - 02 February 2026, Bavaria, Munich: Gold bars lie in a safe on a table at the precious metal dealer Pro Aurum. Photo: Sven Hoppe/dpa

Gold prices slipped more than 2% on Monday, hitting a nearly four-month low, as an escalating Middle East conflict stoked inflation concerns and expectations of higher global interest rates.

Spot gold fell 2.7% to $4,366.94 per ounce as of 0432 GMT, extending losses into a ninth straight session. The metal, which fell to its lowest since January 2 on the day, lost more than 10% last week.

US gold futures ⁠for April delivery ⁠fell 4.5% to $4,369.90, Reuters reported.

"With the Iranian conflict into its fourth week, and oil prices hanging around the $100 level, expectations have pivoted from rate cuts to potential rate hikes, which have tarnished gold's appeal from a yield point of view," said Tim Waterer, chief market analyst, KCM Trade.

"Gold's high liquidity appears to be hurting it during this risk-off period. 

Downturns in stock markets are leading to gold portions being closed to cover margin calls on other assets," Waterer said.

Asian shares fell and oil prices stayed well above $110 a barrel, as investors weighed US and Iranian threats to target energy ⁠facilities.

The closure ⁠of the Strait of Hormuz kept crude elevated, stoking inflation fears by pushing up transport and manufacturing costs. While rising inflation typically boosts gold's appeal as a hedge, high rates curb demand for the non-yielding asset.

Market pricing for a US Federal Reserve rate hike this year has shot up, and is now seen as far more likely than a rate cut, with rate futures pricing in around a 32% chance of a rate hike by December, per the CME FedWatch tool.

Spot silver lost 3.4% to $65.45 per ounce. Spot platinum fell 3.4% to $1,857.67 and palladium was steady at $1,403.10.

Business

Asian Stocks Tumble as Trump Gives Iran 48-hour Ultimatum

The surge in oil prices since the war began have fanned concerns about a fresh spike in inflation. Brandon Bell / GETTY IMAGES NORTH AMERICA/AFP
The surge in oil prices since the war began have fanned concerns about a fresh spike in inflation. Brandon Bell / GETTY IMAGES NORTH AMERICA/AFP
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Asian Stocks Tumble as Trump Gives Iran 48-hour Ultimatum

The surge in oil prices since the war began have fanned concerns about a fresh spike in inflation. Brandon Bell / GETTY IMAGES NORTH AMERICA/AFP
The surge in oil prices since the war began have fanned concerns about a fresh spike in inflation. Brandon Bell / GETTY IMAGES NORTH AMERICA/AFP

Stocks tumbled Monday and oil prices rose after Donald Trump and Iranian leaders traded threats over the key Strait of Hormuz, while Israel said the Middle East war could last several more weeks.

With the conflict now in its fourth week and showing no sign of ending, the head of the International Energy Agency warned of the worst global energy crisis in decades and said the world economy was under "major threat" from the crisis.

Observers, meanwhile, have also raised the prospect of a surge in inflation that could force central banks to hike interest rates, while the choking off of fertilizer shipments has also fanned concerns about global food security.

The US president on Saturday gave Iran 48 hours to reopen the Strait of Hormuz to shipping or face the destruction of its energy infrastructure, reported AFP.

The ultimatum, made just a day after the US leader said he was considering "winding down" military operations, came as the waterway -- through which a fifth of global oil and gas flows -- remained effectively closed.

Trump wrote on Truth Social that the US would "hit and obliterate" Iranian power plants -- "starting with the biggest one first" -- if Tehran did not fully reopen the strait within 48 hours, or 23:44 GMT on Monday, according to the time of his post.

That came a day after Trump ruled out a ceasefire agreement, saying Washington had the upper hand.

Iran warned Hormuz "will be completely closed" if Trump acted on his threat.

And powerful parliament speaker Mohammad Bagher Ghalibaf threatened to irreversibly destroy vital infrastructure across the region, which he said would cause oil prices to rise "for a long time", if Tehran's own infrastructure was hit.

The latest escalation came as Israel's military said it will expand its ground operations in Lebanon against Iran-backed militant group Hezbollah, while a spokesman said the country faced "weeks" more fighting against Iran and Hezbollah.

The escalation hammered stock markets, with Seoul and Tokyo -- which had been the standout performers before the war started -- taking the brunt of the selling, shedding as much as six and five percent, respectively, at one point.

Hong Kong shed more than three percent, while Shanghai, Taipei and Manila all lost more than two percent. Sydney, Singapore and Wellington were also deep in negative territory.

South Korea's won dropped to 1,510 won per dollar, its weakest level since 2009.

Oil prices edged up, with Brent sitting around $112 and West Texas Intermediate just below $100.

- Deadline focus -

"The outcome and Trump's next steps, particularly in the event of escalation, would have significant implications for markets through the remainder of the week and into month and quarter end," wrote Pepperstone's Chris Weston.

He added that while the president has often pulled back from the brink on issues in the past "has also shown credibility in following through with military action when demands are not met, so markets will place weight on his weekend post on Truth Social".

"If we move past the deadline, focus will quickly shift to the scale of any action against Iran and the nature of Iran's response, particularly toward US bases and its allies."

Meanwhile, IEA boss Fatih Birol said Monday: "The global economy is facing a major, major threat today, and I very much hope that this issue will be resolved as soon as possible.

"No country will be immune to the effects of this crisis if it continues to go in this direction. So there is a need for global efforts."

His remarks came as central banks reconsider their monetary policies amid expectations that the surge in oil prices will send inflation soaring, with the Reserve Bank of Australia last week hiking interest rates.

The prospect of higher borrowing costs has hammered non-yielding gold, which has fallen for eight straight days and just suffered its worst weekly drop since 1983.

Bullion was sitting around $4,350 Monday, having hit a record high of almost $5,600 at the end of January.