Taiwan Semiconductor Manufacturing Company on Monday said it would invest $100bn in the US, boosting capacity in the country in a move designed to placate President Donald Trump and head off threatened tariffs on chip imports.
In a news conference with TSMC chief executive CC Wei, Trump said the world’s largest chipmaker would invest “at least” $100bn in state-of-the-art chip fabrication plants in Arizona. He said the investment was in addition to the $65bn that TSMC had previously pledged to invest in the US.
“This will create hundreds of billions of dollars in economic activity and boost America’s dominance in artificial intelligence and beyond,” Trump said, adding that the investment would create 20,000-25,000 jobs.
Wei said TSMC would build three US chip fabs in addition to one that is set to start mass production this year and two more it had previously pledged to build. He said it would also create two plants for advanced packaging — a critical element of the production process that connects chips together to boost performance.
TSMC also plans to build a research and development centre as part of its overall plan, which it said would be the “largest single foreign direct investment in US history”.
The move is the latest overture by business to Trump, as companies unveil measures to placate the president amid his aggressive push to impose tariffs on companies that produce goods overseas for export to the US.
Last week, Apple announced that it would spend more than $500bn in the US over the next four years. Trump said there were “many” other companies that sought to announce increased production in the country.
The president said TSMC was “way ahead of the game” by agreeing to produce more chips in the US, which he said meant the Taiwanese company could avoid tariffs that he mused could be as high as 50 per cent.
“We will have to await additional details to assess what the impact of this investment will be on US chip manufacturing in the long term,” said Chris Miller, author of Chip War, who added that TSMC likely hopes the new investment sets the stage for a productive relationship with the administration.
During the presidential race and after taking office, Trump on several occasions threatened to impose tariffs on imports of chips, which would have a dramatic impact on Taiwan’s economy.
Pressure had been building on TSMC for months after Trump’s repeated accusations that Taiwan “stole” the US semiconductor business. Speaking beside Wei on Monday, the president said Taiwan had a “monopoly” in chips.
Tariffs would expose TSMC to pressure from its American customers to shoulder some of the resulting costs. However, its bigger concern was that Trump could rescind a Biden-era contract under which Washington agreed to support its US facilities with more than $6bn in subsidies.
At the news conference, commerce secretary Howard Lutnick said TSMC had been encouraged to invest $65bn due to the subsidies, but was adding $100bn thanks to efforts by Trump to promote chipmaking in the US.
“[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,” Lutnick added.
The TSMC investment marks a further expansion of its US footprint. During Trump’s first term, the group initially pledged to build one fab plant using five-nanometre technology, but later agreed to use more advanced 4nm technology in the facility.
In 2024 TSMC struck a deal with the Biden administration to build a second facility that would use 2nm by 2028, expected then to be the most cutting-edge, and set up a third fab in the US by the end of this decade. In total, the total expansion increased TSMC’s planned investment in Arizona to $65bn.
Unlike its customers such as Nvidia, which designs and markets chips, or Intel, which designs semiconductors but also manufactures some itself, TSMC exclusively produces chips to the others’ designs.
This approach has allowed it to hone its execution skills in the increasingly complex manufacturing of cutting-edge chips. TSMC holds a more than 90 per cent share of the market for making the most advanced chips.
Lisa Su, chief executive of AMD, praised the work of the Trump administration and TSMC, saying the investment was “extremely important” for the US semiconductor industry, noting that TSMC would start producing its highest-performance chips in the country later this year.
AMD is an important TSMC customer that competes with Nvidia in the advanced AI chip sector.
TSMC’s announcement, which was first reported by The Wall Street Journal, comes after Trump administration officials had in recent weeks floated suggestions for the group to massively step up its investment in the US to placate the president.
The proposals have included TSMC helping to run fabs for Intel, which has fallen behind its Taiwanese rival in cutting-edge manufacturing.
Another idea involved a TSMC equity investment in Intel, or a spin-off of the Taiwanese chipmaker’s American operations into a company with a US government stake, according to people familiar with the situation.
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