WASHINGTON -The U.S. Commerce Department said on Wednesday it planned to award Taiwan's GlobalWafers up to $400 million in government grants to significantly increase production of silicon wafers.

The funds for projects in Texas and Missouri would establish the first U.S. production of 300-mm wafers for advanced semiconductors and expand production of silicon-on-insulator wafers, the Commerce Department said.

The wafers are a crucial component of advanced semiconductors and part of the Biden administration's efforts to boost the chips supply chain.

The planned subsidy would support $4 billion in planned investments by GlobalWafers in both states to construct new wafer manufacturing facilities and create 1,700 construction and 880 manufacturing jobs.

"GlobalWafers will play a crucial role in bolstering America's semiconductor supply chain by providing a domestic source of silicon wafers that are the backbone of advanced chips," Commerce Secretary Gina Raimondo said.

GlobalWafers Chairwoman and CEO Doris Hsu expressed her thanks for the U.S. government support.

"GlobalWafers is pleased to be a key node in the U.S. semiconductor supply chain," she said in a statement.

Currently, five major companies including GlobalWafers control more than 80% of the global 300mm silicon wafer manufacturing market and about 90% of silicon wafers are produced in east Asia.

Under the planned subsidy, GlobalWafers plans to build and expand facilities in Sherman, Texas, to produce wafers used to manufacture leading-edge, mature-node, and memory chips and a new facility in St. Peters, Missouri, for wafers used for defense and aerospace chips.

GlobalWafers also plans to convert a portion of its existing silicon epitaxy wafer manufacturing facility in Texas to produce silicon carbide epitaxy wafers, which are a key component for electric vehicles and clean energy infrastructure.

GlobalWafers said in 2022 it would build a $5 billion plant in Texas to make 300-mm silicon wafers used in semiconductors, switching from a defunct plan to invest in Germany amid ongoing geopolitical concerns and to "address the United States semiconductor supply chain resiliency issues."

Congress in 2022 approved the Chips and Science Act to boost domestic semiconductor output with $52.7 billion in research and manufacturing subsidies program.

The latest award, like the 12 others from the chips subsidy program announced totaling up to $30.1 billion, have yet to be finalized and amounts could change after the Commerce Department conducts due diligence.

  - Reuters