Taiwan Semiconductor Manufacturing Company on Monday announced an investment of $100bn in the US to expand its capacity, aiming to address concerns raised by President Donald Trump and avoid potential tariffs on chip imports.
Speaking alongside TSMC CEO CC Wei, Trump revealed that the chipmaker plans to invest “at least” $100bn in cutting-edge chip fabrication plants in Arizona, in addition to the $65bn it had previously committed to investing in the country.
Trump emphasized that this investment will generate significant economic activity and enhance America’s leadership in artificial intelligence and related technologies, ultimately creating 20,000-25,000 jobs.
TSMC’s plans include constructing three additional chip fabs in the US, alongside the existing facility that is gearing up for mass production this year and two more that were previously announced. The company also intends to establish two advanced packaging plants to enhance chip performance.
As part of its overall strategy, TSMC also intends to set up a research and development center, marking it as the largest single foreign direct investment in US history.
This move is part of a trend among businesses to appease Trump amid his tariff threats on companies manufacturing goods overseas for export to the US.
Last week, Apple disclosed its plan to invest over $500bn in the US over the next four years. Trump hinted at numerous other companies expressing similar intentions to ramp up production in the country.
Trump commended TSMC for agreeing to expand chip production in the US, which could potentially exempt the Taiwanese company from tariffs reaching as high as 50% that the president had contemplated.
Chris Miller, author of Chip War, indicated that more details are needed to assess the long-term impact of TSMC’s investment on US chip manufacturing. He also suggested that TSMC likely aims to establish a positive rapport with the administration through this new investment.
During and following his presidential campaign, Trump had repeatedly raised the prospect of imposing tariffs on chip imports, which could have significant implications for Taiwan’s economy.
Pressure had been mounting on TSMC amid Trump’s allegations that Taiwan had “stolen” the US semiconductor industry. Trump, alongside Wei, referred to Taiwan as having a “monopoly” in chip manufacturing.
In addition to the potential impact of tariffs, TSMC was concerned about the fate of a contract from the Biden administration providing over $6bn in subsidies to its US facilities, which Trump could potentially revoke.
During the press conference, commerce secretary Howard Lutnick mentioned that TSMC’s initial $65bn investment was due in part to these subsidies, and the additional $100bn commitment was a result of Trump’s efforts to bolster chip production in the US.
Lutnick added, “[Companies] are coming here in huge size because they want to be in the greatest market in the world, and they want to avoid the tariffs.”
TSMC’s investment signifies a further expansion of its presence in the US. Initially pledging to construct a fab plant utilizing five-nanometer technology during Trump’s first term, the company later decided to utilize a more advanced 4nm technology in the facility.
By 2028, TSMC had entered into an agreement with the Biden administration to build a second facility using 2nm technology, aiming to be at the forefront of innovation in the industry. Another fab in the US is slated to be operational by the end of the decade, with the total investment in Arizona amounting to $65bn.
Unlike its customers like Nvidia or Intel, TSMC’s primary focus is on producing chips based on designs by other companies. This approach has enabled TSMC to refine its expertise in manufacturing cutting-edge chips and dominate over 90% of the market.
Lisa Su, CEO of AMD, commended the Trump administration and TSMC for the significant investment, highlighting its importance for the US semiconductor industry. She noted that TSMC will commence the production of its highest-performance chips in the US later this year, with AMD being a prominent customer competing with Nvidia in the AI chip sector.
Following reports from The Wall Street Journal, TSMC’s announcement comes after discussions within the Trump administration to ramp up the company’s investment in the US significantly to appease the president.
Proposals included TSMC collaborating with Intel on fabs and potential equity investments or spin-offs involving the Taiwanese chipmaker’s American operations with the US government having a stake.
