Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading contract chipmaker, is set to expand its investment in the United States by an additional $100 billion, constructing five new state-of-the-art fabrication plants on American soil. The announcement was made by Donald Trump alongside TSMC’s CEO.
Trump emphasized that this major investment would allow TSMC—responsible for producing the majority of the world’s most advanced semiconductors—to avoid the tariffs he has proposed for the global semiconductor industry.
His administration has been pushing to shift more manufacturing to the U.S. in an effort to strengthen domestic production and assert trade dominance over both rivals and allies.
TSMC CEO CC Wei made the official announcement at the White House, standing alongside Trump, U.S. Commerce Secretary Howard Lutnick, and Trump adviser on AI and cryptocurrency, David Sacks. With this latest expansion, TSMC’s total U.S. investment will now reach $165 billion.
“We are producing the most advanced chip on U.S. soil,” Wei stated. “Now the vision becomes reality.”
Trump praised Wei as a “legend” and highlighted that the expansion would generate thousands of jobs. He also framed the move as a national security priority, positioning the U.S. to secure a substantial share of the global semiconductor market.
Taiwan’s Role in Global Semiconductor Production
Taiwan remains the dominant force in advanced semiconductor manufacturing, keeping most of its production within its borders under tight security measures. Analysts argue that this strengthens global incentives to defend Taiwan from a potential Chinese invasion.
“Taking away Taiwan’s technology sector will reduce the power of Taiwan’s ‘silicon shield,’” said James Yifan Chen, an assistant professor in the department of diplomacy and international relations at Tamkang University in Taiwan.
On Monday, Trump warned that a Chinese invasion of Taiwan would be a “catastrophic event.” He noted that TSMC’s investment in the U.S. “will at least give us a position where we have, in this very, very important business, a big part of it within the United States.”
Taiwan’s Premier Cho Jung-tai responded on Tuesday, emphasizing the importance of close collaboration between industries and the government in the global supply chain. “Keeping roots in Taiwan and continuing to strengthen Taiwan is the shared stance of the country, government, and industry, and it will remain unwavering,” he stated, according to local media.
Taiwanese authorities have said they will review TSMC’s investment to ensure that it aligns with both the company’s growth strategy and the overall competitiveness of Taiwan’s semiconductor industry.
“The close cooperation in high-tech industries between Taiwan and the United States has made Taiwan the most important partner for the United States in maintaining its leading position in high-tech and technology industries,” said cabinet spokeswoman Michelle Lee.
Su Chi-yen, a spokesperson for Taiwan’s department of investment review, told AFP that the government has the authority to block the investment if necessary, though most past rejections have been due to incomplete documentation.
TSMC CEO Visiting US
TSMC’s Growing Presence in the U.S.
Last April, Wei agreed to expand TSMC’s planned investment in the U.S. by an additional $25 billion, bringing the total to $65 billion, with two more factories to be added to the Arizona site by 2030.
TSMC first established operations in Arizona in 2020, and production at its existing facility began late last year. Its ongoing expansion in the U.S. signals a significant boost to domestic semiconductor manufacturing at a time when much of the industry remains concentrated in Asia.
The chips manufactured by TSMC are essential to a vast range of technology, powering everything from smartphones and vehicle systems to artificial intelligence servers.
U.S. Government’s Role in Semiconductor Expansion
Commerce Secretary Howard Lutnick previously told lawmakers that the U.S. semiconductor investment program was a solid “down payment” toward rebuilding the sector. However, he has been hesitant to commit to grants that had already been approved by the department, stating that he wants to “read them, analyze them, and understand them” before moving forward.
On Monday, Lutnick repeatedly credited Trump for increasing U.S. chip production. “Now you’re seeing the power of Donald Trump’s presidency,” he said.
Under the previous administration, the U.S. Commerce Department finalized a $6.6 billion government subsidy in November for TSMC’s U.S. semiconductor production in Arizona.
In 2022, then-President Joe Biden signed the CHIPS and Science Act, which allocated $52.7 billion in subsidies for semiconductor production and research in the U.S. The goal was to expand domestic chip manufacturing and reduce America’s reliance on Asian semiconductor suppliers.
A TSMC spokesperson confirmed last month that the company had received $1.5 billion in CHIPS Act funding before the change in administration, as part of an agreement based on project milestones.
As part of its Arizona expansion, TSMC has committed to producing 2-nanometer chips at its second plant, which is scheduled to begin operations in 2028. The company also plans to implement its most advanced chip manufacturing technology, known as “A16,” at the site. The U.S. investment package includes up to $5 billion in low-interest government loans.
Trump’s Stance on Tariffs and Manufacturing
While campaigning for president, Trump criticized the CHIPS Act, arguing that tariffs would be a more effective way to bring foreign manufacturing to the U.S.
On Monday, Trump reaffirmed that because TSMC is building plants in the U.S., it will not be subject to the tariffs he has proposed. He also announced that reciprocal tariffs on Canada and Mexico will take effect on April 2. Businesses in those countries that wish to avoid the tariffs, he said, should consider relocating their manufacturing operations to the U.S.
“That’s what Mr. Wei is doing,” Trump said. “He’s way ahead of the game.”
