Trump Highlights TSMC’s $100 Billion U.S. Expansion as a Tariff Triumph
In a significant move for the semiconductor industry, TSMC’s $100 billion expansion plan in the United States has been spotlighted by former President Donald Trump. He emphasized that the decision was influenced not by subsidies but by the strategic threat of imposing tariffs on imported semiconductors.
TSMC, a prominent player in the global chip manufacturing arena, is in the process of constructing a $65 billion complex in Phoenix, Arizona. This investment includes three fabrication facilities, commonly known as fabs, with plans to add three more as part of the new expansion.
During a recent address to Congress, Trump declared, “Yesterday, Taiwan Semiconductor … announced a $165 billion investment to build the most powerful chips on earth, right here in the USA,” further asserting that the U.S. government is not financially supporting the venture.
However, under the 2022 CHIPS and Science Act, the federal government committed $6.6 billion to assist in TSMC’s expansion efforts in Phoenix. Despite calling the Act “a horrible, horrible thing,” Trump urged lawmakers to repeal it.
President Joe Biden ensured the funding’s continuity, and by the time Trump took office, TSMC had already secured $1.5 billion. Wendell Huang, TSMC’s Chief Financial Officer, confirmed to CNBC that the initial government support was received in the fourth quarter.
Following Biden’s announcement of the $6.6 billion subsidy, TSMC increased its investment in Phoenix from $40 billion to $65 billion. TSMC is a key supplier for tech giants like Apple, Nvidia, and Qualcomm, providing essential chips for smartphones, autonomous vehicles, and AI technologies.
While the first Phoenix fab is operational and the second is under construction, the third is projected to be functional by 2030. The $165 billion investment Trump mentioned includes the $65 billion initially committed before his reelection campaign.
Trump and TSMC CEO C.C. Wei jointly announced the additional $100 billion investment, which will lead to three more fabs in Phoenix, alongside two advanced packaging facilities and a potential R&D center elsewhere.
Already the largest foreign investment in Arizona, the TSMC project has been hailed by Trump, who remarked, “It’s going to mostly be in Arizona, from what I understand. Which is a great state. I like it because I won it.”
Trump reiterated his desire to overturn the CHIPS Act, arguing that companies would prefer building in the U.S. to evade tariffs. The Act, amounting to $280 billion, allocated $53 billion to enhance domestic chip research and production.
Trump initially proposed tariffs on imported semiconductors, claiming that the potential tax burden prompted TSMC’s expansion. “The incentive is going to be that they are not going to want to pay a 25%, 50% or even a 100% tax,” Trump told House Republicans.
Senators Mark Kelly and Ruben Gallego, both Democrats from Arizona, criticized Trump’s stance. Kelly highlighted that dismantling the CHIPS Act would harm the American microchip industry, while Gallego accused Trump of acting out of spite towards Biden.
The announcement has caused a stir in Taiwan, where TSMC’s role is crucial for its security against China. Taiwan’s President Lai Ching-te reassured that TSMC’s expansion fosters international cooperation and strengthens Taiwan.
For more stories from Cronkite News, visit cronkitenews.azpbs.org.
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