Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading producer of advanced AI chips, has announced plans to invest an additional $100 billion into its U.S. operations. This move will bolster President Donald Trump’s goal of increasing domestic manufacturing, particularly in the crucial semiconductor sector.
TSMC’s CEO, C.C. Wei, joined President Trump at the White House to unveil the company’s vision for expanding its U.S. footprint, which initially began in 2020 during Trump’s first term. Trump hailed the investment as a key step towards ensuring that “the most powerful AI chips in the world will be made right here in America,” emphasizing its strategic importance for the U.S. economy.
The new investment adds to TSMC’s previously announced $65 billion commitment, and the expansion will include several advanced manufacturing plants across the U.S. These will focus on wafer fabrication and advanced packaging, bringing TSMC’s American presence to a total of six plants dedicated to these technologies.
Trump, speaking from the Roosevelt Room, remarked that semiconductors are critical to powering industries like AI, automobiles, and advanced manufacturing, declaring, “Without the semiconductors, there is no economy.”
Strategic Significance of TSMC’s Investment
As the global leader in the production of semiconductors used in artificial intelligence, TSMC is also a key supplier for major tech companies, including Nvidia and Apple. Following the announcement, Nvidia expressed its reliance on TSMC’s new U.S. plants to help strengthen the resilience of the technology supply chain in the U.S.
“We’re going to produce many chips to support AI progress and to support the smartphones’ progress,” said Wei, adding that the expansion will create thousands of high-tech manufacturing jobs in the U.S.
However, TSMC’s investment plans are contingent on approval from Taiwan’s government. Taiwanese officials have signaled they will carefully review these outbound investments, given the strategic importance of advanced chip technology.
Impact on U.S. Trade and Tariffs
Although TSMC’s decision is seen as a significant move in Trump’s bid to boost U.S. manufacturing, analysts note that the company’s expansion is more likely influenced by political pressure than tariffs alone. Bernstein analysts, including Mark Li, noted, “A larger U.S. scale may imply heavier cost, but possibly may also provide scale benefits and lower cost.”
The announcement came as Trump is considering imposing tariffs on a broad range of industries, including semiconductors, in an effort to address global trade imbalances. Trump has long accused Taiwan of “stealing” the U.S. semiconductor industry and has threatened tariffs on foreign-produced chips. However, by manufacturing chips on U.S. soil, companies like TSMC can avoid these levies. Trump reiterated, “By doing it here, he has no tariffs.”
While the Chips and Science Act—signed into law by President Biden in 2022—was designed to revitalize U.S. semiconductor production through government subsidies, Trump has expressed a preference for using tariffs to incentivize manufacturing. TSMC has already received $6.6 billion in grants under this act to support its U.S. plants.
Broader Implications for U.S. Tech and Manufacturing
This move follows a larger trend of technology investments aimed at solidifying the U.S. as a leader in advanced manufacturing, particularly in AI and semiconductors. Companies such as Apple, OpenAI, and Meta Platforms have pledged significant investments, with commitments totaling over $1 trillion, although some of these investments may involve previously planned spending.
Trump’s efforts to reshape U.S. manufacturing are also evident in ongoing discussions with Intel about a potential deal for TSMC to take a controlling stake in Intel’s factories. These talks reflect concerns about Intel’s financial challenges and its plans to scale back expansion.
TSMC’s first facility in Arizona is already operational, and early production yields have exceeded expectations compared to similar facilities in Taiwan. AMD CEO Lisa Su praised the Trump administration’s efforts to boost U.S. manufacturing, noting that AMD is already working with TSMC at the Arizona plant. “We are looking forward to being able to say our highest-performance products are being produced in the U.S. starting later this year,” Su said.
In summary, TSMC’s massive new investment in U.S. manufacturing aligns with Trump’s vision for a stronger, more self-sufficient semiconductor industry in the U.S., while also providing a clear path for major tech companies to boost their domestic supply chains. However, the move also highlights ongoing geopolitical tensions and the broader impacts of trade policies on global manufacturing strategies.
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