Semiconductor giant Taiwan Semiconductor Manufacturing Company announced Monday that it is pouring another $100 billion into its U.S. operations after President Donald Trump’s tariff threat on foreign chips.
Newsweek reached out to TSMC and Taiwan’s Foreign Ministry by email with requests for comment.
Why It Matters
Taiwan plays a crucial role in global chip industry, producing 60 percent of the world’s semiconductors, providing essential components in everything from electric cars to ATMs. TSMC alone accounts for some 90 percent of the most-advanced chips, including those that power artificial intelligence—an area of intensifying competition with China.
Since January, Trump has threatened to impose tariffs of at least 25 percent on semiconductor imports, unless foreign chipmakers expand their operations in the U.S. The president also falsely accused Taiwan of “stealing” America’s chip industry. Tariffs are taxes on foreign goods paid by importers and typically passed on to consumers.
What To Know
The new TSMC investments will fund three new chip fabrication plants [fabs], two advanced packaging facilities, and a new research and design (R & D) center. This brings the company’s total investment in Phoenix, Arizona, to $165 billion—the largest foreign direct investment in U.S. history.
In its press release, TSMC projected that the investment would “support 40,000 construction jobs over the next four years and create tens of thousands of high-paying, high-tech jobs in advanced chip manufacturing and R & D.”
File photo: The Taiwan Semiconductor Manufacturing Company logo is displayed on a smartphone with a ticker board in the background. File photo: The Taiwan Semiconductor Manufacturing Company logo is displayed on a smartphone with a ticker board in the background. Business Wire via Associated Press
“The most powerful AI chips in the world will be made right here in America, and it’ll be a big percentage of the chips made by this company,” Trump said during a press conference at the White House alongside TSMC Chairman C.C. Wei.
Trump called semiconductors the “backbone of the 21st century” and a national security issue. “We must be able to build the chips and semiconductors that we need right here with American factories and American skill and American labor,” he added.
“TSMC just doubled down on Phoenix—and for good reason,” wrote Phoenix Mayor Kate Gallego on X (formerly Twitter). “More jobs, more tech, and more game-changing innovation. The future isn’t just coming, we’re building it.”
As for TSMC, the move will allow it to “diversify its presence in another place and a safe place,” Trump added.
Some observers have suggested that relocating Taiwanese chip production to the U.S. could weaken its “silicon shield”—a term referring to Taiwan’s critical role in global supply chains, which may serve as a deterrent against a Chinese invasion. Beijing claims the self-ruled island as its territory and has vowed to unify with it, by force if necessary.
Washington, long Taiwan’s strongest supporter and primary supplier of foreign arms, maintains a policy of “strategic ambiguity” designed to keep China uncertain about whether the U.S. would commit troops to Taiwan’s defense.
Trump’s derogatory remarks about Taiwan, including his suggestion that Taipei should pay “protection” money, have renewed debate on the island about American reliability.
Adding to these concerns is the president’s move to blame Ukraine for Russia’s 2022 invasion and Trump’s embrace of Kremlin talking points as his administration pursues a swift end to the conflict.
What People Are Saying
C.C. Wei, TSMC chairman, said in a company press release: “Back in 2020, thanks to President Trump’s vision and support, we embarked on our journey of establishing advanced chip manufacturing in the United States. This vision is now a reality. AI is reshaping our daily lives and semiconductor technology is the foundation for new capabilities and applications.”
AI chip designer Nvidia wrote on X: “TSMC’s new fabs will be the foundational pillar of a new technology supply chain centered in the United States. NVIDIA will fully utilize TSMC’s global manufacturing network to enhance our supply agility and resilience.”
Ryan Hass, director of Brookings Institution think tank’s John L. Thornton China Center, wrote in a commentary last month: “[One side of the policy debate in Taipei] is that Taiwan has become such a major global issue that Taiwan must proactively engage Trump and his senior advisers.
“In this telling, Taiwan’s leaders must find ways to persuade Trump that (1) Taiwan is indispensable to his vision of reindustrializing the United States and spurring a renaissance of American advanced manufacturing; (2) Taiwan takes its own security seriously; and (3) Taiwan is a stable, steady, responsible actor in the cross-Strait relationship and is not an instigator of rising tensions in the region.”
What Happens Next
News of TSMC’s expansion raised concerns in Taiwan that the deal would entail moving the company’s cutting-edge chip production to the U.S.
Economics Minister Kuo Jyh-huei reassured lawmakers stateside that fabs will not be producing 2-nm chips or the even more advanced 1.6-nm chips next year, local media reported. Premier Cho Jung-tai stressed both the government and semiconductor industry are acting with Taiwan’s national interests in mind.
