WASHINGTON, Dec 17 (Reuters) - The U.S. Commerce

Department said on Tuesday it has finalized $406 million in

government grants to Taiwan's GlobalWafers to

significantly increase production of silicon wafers in the

United States.

The funds for projects in Texas and Missouri will establish

the first high-volume 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 domestic chips supply chain.

The subsidy will support nearly $4 billion in investments by

GlobalWafers in both states to construct new wafer manufacturing

facilities and create 1,700 construction and 880 manufacturing

jobs.

"We look forward to innovating with our U.S.-based chip

customers for decades to come," GlobalWafers CEO Doris Hsu.

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.

Currently, five major companies including GlobalWafers

control more than 80% of the global 300-mm silicon wafer

manufacturing market and about 90% of silicon wafers are

produced in east Asia.

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.

The department has been racing to finalize awards under the

2022 $52.7 billion 2022 CHIPS and Science Act semiconductor

manufacturing and research subsidy program before

President-elect Donald Trump takes office on Jan. 20 .

Last week, Commerce finalized a $6.165 billion government

subsidy for Micron Technology ( MU ) to produce semiconductors

in New York and Idaho.

Commerce has finalized other awards in recent weeks

including a $7.86 billion award for Intel ( INTC ), $6.6 billion for

Taiwan Semiconductor Manufacturing Co's ( TSM ) opens new U.S.

unit and $1.5 billion for GlobalFoundries ( GFS ).

(Reporting by David Shepardson; Editing by Lincoln Feast.)