TSMC’s overseas subsidiaries received NT$167.587 billion in government subsidies from the United States, Germany, Japan, and China in the first three quarters of this year, of which approximately NT$166.996 billion was received in the third quarter. Under TSMC’s accounting policy, subsidies related to factory construction are deducted from the cost of property, plant, and equipment, then reflected in profit or loss over several years through lower depreciation. During the same period, TSMC Arizona earned NT$53.986 billion. （Earlier report: US Commerce Secretary previews new round of chip tariffs: no tariffs for building factories in the US, higher tariffs for those that don’t） （Background: Bloomberg: TSMC is weighing another US$10 billion investment in a new Texas plant, watching to see whether the US extends investment tax credits） Key takeaways TSMC received approximately NT$166.996 billion in government subsidies in the third quarter Factory-construction subsidies are deducted from equipment costs and recognized over several years through lower depreciation TSMC Arizona earned NT$53.986 billion in the first three quarters TSMC’s (2330) consolidated financial report for the third quarter disclosed that its overseas subsidiaries received a total of NT$167.587 billion in government subsidies from various countries between January and September this year. The same line item in the first-half financial report was only NT$590 million. Subtracting the figures in the two reports puts the third-quarter total at approximately NT$166.996 billion. The cumulative total for the same period last year was NT$71.898 billion, making this year’s first-three-quarter figure 2.3 times as much. This amount also exceeds the combined total for the previous two full years. According to TSMC’s 2025 annual consolidated financial report, the company received NT$76.259 billion in subsidies for the full year 2025. The total for 2024 was NT$75.164 billion, bringing the two-year combined figure to NT$151.423 billion. The Liberty Times first reported these figures on November 13. Construction subsidies are first deducted from factory costs, then reflected in profit or loss over several years A note to the financial report states that the subsidies came from TSMC Arizona, Germany’s ESMC, Japan’s JASM, and TSMC’s Nanjing plant, and were provided by the governments of the United States, Germany, Japan, and China, respectively. They are mainly used to subsidize the acquisition costs of property, plant, and equipment, as well as some of the costs and expenses associated with factory construction and production operations. The note does not break down the amounts by country or explain the reason for the sharp increase in the third-quarter figure. The third-quarter financial report notes that the accounting policies are the same as those in the 2025 annual report. Under the 2025 annual report, subsidies conditional on the purchase or construction of non-current assets are deducted from the carrying amount of those assets. They are subsequently recognized in profit or loss over the assets’ useful lives through reduced depreciation or amortization expenses. Subsidies intended to compensate for expenses already incurred are instead deducted directly from the related expenses for the current period. In other words, construction-related subsidies first reduce the book value of property, plant, and equipment. They are then reflected gradually through lower depreciation charges each year, rather than being recognized as income all at once in the quarter they are received. Each subsidiary has subsidy agreements with its local government, which include construction schedules and other conditions that must be met. The financial report also notes that TSMC Arizona can apply for investment tax credits for eligible investments. The credit rate was originally 25% of the investment amount, but was raised to 35% effective January 1 this year following a change in the law. Arizona plant earns NT$53.986 billion in the first three quarters; German plant remains in the red Information on investee companies in the same report shows that TSMC Arizona earned NT$53.986 billion in the first three quarters of this year. Compared with NT$36.066 billion in the first-half financial report, this puts its third-quarter earnings at approximately NT$17.920 billion. TSMC owns 100% of TSMC Arizona. Japan’s JASM earned NT$2.396 billion in the first three quarters, with approximately NT$718 million in the third quarter. TSMC owns a 73% stake. Germany’s ESMC recorded a loss of NT$1.079 billion in the first three quarters, including a third-quarter loss of approximately NT$386 million. TSMC owns a 70% stake. The third-quarter subsidy total was approximately three times TSMC Arizona’s earnings for the first three quarters. The two figures are different in nature. The subsidies are funds provided by the governments of four countries for multiple overseas plants, mainly for factory construction and equipment. The NT$53.986 billion, by contrast, is the profit recorded on the income statement of a single subsidiary. Subsidy commitments from the United States, Japan, and Germany On November 15, 2024, the US Department of Commerce finalized a subsidy agreement with TSMC under the CHIPS Act, providing up to US$6.6 billion in direct subsidies for TSMC Arizona. At the exchange rate on November 14, this was equivalent to approximately NT$217.2 billion. According to Axios, the funds are disbursed in installments based on construction and production progress. On August 20, 2024, the European Commission approved €5 billion in German state aid for ESMC’s Dresden plant, equivalent to approximately NT$181.7 billion. In June 2022, Japan’s Ministry of Economy, Trade and Industry approved subsidies of up to ¥476 billion for JASM’s first Kumamoto plant, equivalent to approximately NT$98 billion. In February 2024, it approved up to ¥732 billion for the second plant, equivalent to approximately NT$150.8 billion. These are all the maximum subsidy amounts pledged by the respective governments. TSMC’s financial reports disclose only the total amounts received in each period, without a breakdown by country. It is not possible to determine from the financial reports which countries the NT$166.996 billion received in the third quarter came from. Frequently asked questions Does TSMC’s NT$167 billion in third-quarter government subsidies count as profit? Under TSMC’s accounting policy, construction-related subsidies are deducted from the carrying amount of property, plant, and equipment, then recognized in profit or loss over the assets’ useful lives through lower depreciation. They are not recognized all at once as income in the quarter they are received. Which countries provide TSMC with government subsidies? The financial report lists the governments of the United States, Germany, Japan, and China. The recipients are TSMC Arizona, ESMC, JASM, and the Nanjing plant. The total for the first three quarters was NT$167.587 billion. Related articles Kumamoto is in a high-risk earthquake zone. Why did TSMC choose to set up there? Taiwan-based companies add US$20 billion to their US investments, bringing the total to US$55 billion, excluding TSMC TSMC and SONY plan to form a joint venture focused on next-generation image sensors, targeting autonomous driving, AI, and robotic perception This article, “TSMC receives NT$167 billion in government subsidies, mainly to support ‘overseas factory construction,’” was first published on BlockTempo (the most influential blockchain news media).