TSMC Promises $100B US Expansion That Trump Hails Without Clarifying Chip Tariff Threat

Standing alongside US President Donald Trump, the CEO of Taiwanese chipmaking champ TSMC on Monday announced a plan to invest $100 billion on expanded operations in Arizona.

TSMC boss CC Wei said the billions of dollars will go toward three new fabrication plants, two advanced packaging facilities, and a “major R&D team center.” The factory giant claimed this is “the largest single foreign direct investment in US history.”

The maker of AMD and Nvidia chips had already committed to investing $65 billion in the USA, starting with a plan in 2020 to build a fab in Arizona. That facility is now online, and at a White House press conference just hours ago, Wei said: "In Phoenix, Arizona, with 3,000 employees, we are producing the most advanced chips made on US soil.”

The corporation, we note, last year said it would expand that Arizona site to include additional fabrication and advanced packaging facilities crucial to the assembly of AI accelerators.

TSMC's American customers include Apple, which began using the Arizona fab to bake chips for its iThings last month.

Trump touted the economic impact of TSMC’s planned investment, claiming it will result in the creation of between 20,000 and 25,000 high-paying jobs.

How TSMC will find those workers wasn’t addressed during Wei's appearance. Consulting firm McKinsey last year estimated a shortage of 59,000 to 146,000 semiconductor engineers and technicians stateside by 2029. Perhaps Intel's decision to delay completion of its Ohio fab site until the 2030s will help TSMC to find workers.

US Commerce Secretary Howard Lutnick indicated TSMC's expansion won’t be subsidized. And by making the chips in the US, they won't be subject to the taxes Trump has been threatening on imported foreign-made semiconductors.

"Under the Biden administration, TSMC received a [$6.6] billion grant, and that encouraged them to build $65 billion. So, America gave TSMC 10 percent of the money to build here," Lutnick said. "Now you're seeing the power of Donald Trump's presidency, because TSMC, the greatest manufacturer of chips in the world, is coming to America with a $100 billion investment. And, of course, that is backed by the fact that they can come here because they can avoid paying tariffs."

Lutnick's boss President Trump is no fan of the CHIPS Act that provided that aforementioned grant; a reported 40 percent of the federal team that administers the $53 billion subsidy pot were laid off this month.

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Speaking at the press conference, Trump welcomed TSMC’s investment.

"If they did them in Taiwan to send them here, they'd have [tariffs of] 25 percent, 30 percent, or 50 percent, or whatever the number may be someday," the President said, essentially reiterating his threat to tax imported processors and other semiconductors. "By doing it here, he has no tariffs."

The White House may be willing to waive tariffs on all TSMC-made chips immediately, as a result of this arrangement, or Trump may be referring strictly to components made in the USA when he says "no tariffs."

If it's the latter, buyers may well have to pay higher prices for devices that include imported TSMC silicon for years to come because it took roughly four years for the biz to bring its first Arizona chip plant online and its second isn't expected to begin churning out chips until sometime in 2027 or 2028.

The Trump administration is yet to detail its planned semiconductor tariffs, and when they will be introduced, other than to say that they're likely to start around 25 percent and "get bigger and bigger with time."

By announcing expansion plans today, TSMC may be looking to establish some goodwill with the Trump administration and limit its exposure to import levies, or potentially win exemptions for key customers. ®

Read more commentary on TSMC, the White House, and more, here over on The Next Platform