Striking a four-year deal with President Donald Trump, the Taiwan Semiconductor Manufacturing Co. (TSMC) plans to invest $100 billion in chip manufacturing plants in the US, sources told The Wall Street Journal.
According to “people familiar with the matter,” Trump will officially announce the deal later today. While still unconfirmed, TSMC’s supposed investment comes after OpenAI and Apple announced similarly vague plans to each invest $500 billion into the US in apparent efforts to get on Trump’s good side. It’s hard to tell if these plans are actually new or if companies had already planned to invest heavily without outside pressure, WSJ noted.
It’s undeniable that expanding TSMC’s US presence has long been a goal for the US. TSMC announced its first fab in 2020, initially committing $12 billion over 10 years. Since then, TSMC’s investments over time have expanded, reaching $40 billion by 2022. Last year, its investments notched up again when TSMC was awarded $6.6 billion in direct funding under the CHIPS Act to “support the company’s planned investment of more than $65 billion in three greenfield leading-edge fabs in Phoenix, Arizona,” the Commerce Department press release said. At that time, Joe Biden had promised those fabs would “manufacture the most advanced chips in the world,” putting the US “on track to produce 20 percent of the world’s leading-edge semiconductors by 2030.”
Now, TSMC is seemingly prepared to invest even more to build out cutting-edge fabs that Trump envisions will help re-establish the US as a semiconductor manufacturing leader after decades of ceding that power to mostly Asian countries, the WSJ noted.
Last year, production began at TSMC’s first Arizona fab, where Apple is a primary customer after years of importing chips from Taiwan. At that time, TSMC Arizona Chairman Rick Cassidy told CNBC that the Arizona fab was producing chips “on par” with fabs in Taiwan. If all goes to plan, TSMC’s second fab should be operational by 2028, and the third could be up and running by 2030. Customers are expected to include companies already doing business with TSMC, like AMD, Apple, Nvidia, and Qualcomm.
Currently, TSMC only builds its most advanced chips in Taiwan. But when the most advanced US fabs are operational, they’ll be prepared to manufacture “tens of millions of leading-edge chips” to “power products like 5G/6G smartphones, autonomous vehicles, and AI datacenter servers,” the Commerce Department said in 2024.
TSMC has not confirmed the WSJ’s report but provided a statement: “We’re pleased to have an opportunity to meet with the President and look forward to discussing our shared vision for innovation and growth in the semiconductor industry, as well as exploring ways to bolster the technology sector along with our customers.”
Trump threat of semiconductor tariffs still looms
Advanced chips are regarded as critical for AI innovation, which Trump has prioritized, as well as for national security.
Without a steady supply, the US risks substantial technological and economic losses as well as potential weakening of its military.
To avert that, Trump campaigned on imposing tariffs that he claimed would drive more semiconductor manufacturing into the US, while criticizing the CHIPS Act for costing the US billions. Following through on that promise, in February, he threatened a “25 percent or more tariff” on all semiconductor imports, the WSJ reported. According to CNBC, Trump suggested those tariffs could be in effect by April 2.
“We have to have chips made in this country,” Trump said last month. “Right now, everything is made in Taiwan, practically, almost all of it, a little bit in South Korea, but everything—almost all of it is made in Taiwan. And we want it to be made—we want those companies to come to our country, in all due respect.”
While it’s unclear if Trump plans to overtly kill the CHIPS Act, his government funding cuts could trigger a future where the CHIPS Act dies with no workers left to certify that companies meet requirements for ongoing award disbursements, a semiconductor industry consultant group, Semiconductor Advisors, warned in a statement last month.
“If I were running a chip company, I would not count on CHIPS Act funding, even if I had a signed contract,” SA’s statement said.