Trump Announces TSMC’s $100 Billion Investment in U.S. Chip Manufacturing
TSMC Expands U.S. Operations with Five New Plants, Avoiding Tariffs
Taiwan Semiconductor Manufacturing Co. (TSMC) is set to increase its U.S. investment by $100 billion, constructing five state-of-the-art semiconductor fabrication plants, former President Donald Trump announced alongside TSMC’s CEO. The move bolsters U.S. semiconductor production while allowing TSMC to bypass tariffs Trump has considered imposing on the industry to encourage domestic manufacturing.
Speaking at the White House, TSMC Chief Executive CC Wei stated that the investment brings the company’s total U.S. chip manufacturing commitment to $165 billion. “We are producing the most advanced chip on U.S. soil,” Wei said. “Now the vision becomes reality.”
Trump praised Wei as a “legend” and emphasized that the investment would create thousands of jobs. He argued that expanding semiconductor manufacturing domestically is crucial for national security and would increase the U.S.'s share of the global chip market. Taiwan currently dominates advanced semiconductor production, with most of its manufacturing tightly controlled on the island, a factor some analysts see as a deterrent to a potential Chinese invasion.
James Yifan Chen, an assistant professor at Tamkang University in Taiwan, warned that shifting Taiwan’s semiconductor technology abroad could weaken the island’s "silicon shield," reducing its geopolitical leverage.
During his remarks, Trump reiterated his warning that a Chinese invasion of Taiwan would be a "catastrophic event." He stated that TSMC’s U.S. investment ensures the country secures a significant position in the semiconductor industry.
Taiwan’s government has acknowledged the investment announcement, with Premier Cho Jung-tai stressing the importance of maintaining strong collaboration between industry and government. He reaffirmed Taiwan’s commitment to preserving its leadership in the semiconductor sector. The country’s investment review department said it would evaluate the deal to ensure it aligns with Taiwan’s interests and the competitiveness of its chip industry.
Michelle Lee, a spokeswoman for Taiwan’s cabinet, highlighted Taiwan’s essential role in U.S. high-tech dominance, calling the nation the “most important partner” in American technology leadership. Su Chi-yen, a spokesman for Taiwan’s investment review body, noted that the government could potentially block the investment but emphasized that past rejections typically stemmed from incomplete documentation.
TSMC’s expansion builds on a prior commitment to increase its U.S. spending by $25 billion to $65 billion, adding two additional plants to its Arizona site by 2030. The company, the world’s largest contract chipmaker, first launched its U.S. operations in Arizona in 2020, with production beginning last year.
The company’s semiconductors are vital to various industries, including smartphones, automotive technology, and artificial intelligence servers. Last year, TSMC confirmed plans to manufacture the world’s most advanced 2-nanometer chips at its second Arizona plant, expected to start production in 2028. Additionally, it will implement its cutting-edge "A16" chip technology in Arizona.
The U.S. government has provided financial incentives to support domestic semiconductor manufacturing. Under former President Joe Biden, the Commerce Department finalized a $6.6 billion subsidy for TSMC’s Arizona operations in November. The 2022 Chips and Science Act allocated $52.7 billion in funding to expand U.S. semiconductor production and research, reducing reliance on Asian-made chips. A TSMC spokesperson previously confirmed the company received $1.5 billion in Chips Act funding under pre-existing agreements before the new administration took office. The company’s U.S. investments also include up to $5 billion in low-interest government loans.
Despite this, Trump had criticized the Chips Act during his presidential campaign, arguing that imposing tariffs would be a more effective strategy to bring foreign manufacturers to the U.S. On Monday, he confirmed that TSMC’s U.S. investment exempts the company from his proposed tariffs. He also announced that reciprocal tariffs on Canada and Mexico will take effect on April 2, encouraging companies in those countries to move production to the U.S. to avoid penalties.
“That’s what Mr. Wei is doing,” Trump remarked. “He’s way ahead of the game.”
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