The world’s largest contract chipmaker, TSMC, is investing $160 billion in Phoenix, Arizona, to establish several chip manufacturing facilities. The firm said the initiative aims to strengthen Taiwan’s ties with the U.S.
The President of Taiwan, Lai Ching-te, also said on Friday that the country is planning to invest more in semiconductor manufacturing in Arizona. He met with Arizona Senator Ruben Gallego and told him that the investment in the state is proof of cooperation between the two countries’ tech industries.
Trump urges major chip manufacturers to invest in the U.S.
Lai also acknowledged that the initiative is an example of the successful economic and technological collaboration between the two countries. The semiconductor investment comes as U.S. President Donald Trump urged major chip producers to expand their investment in the country.
Taiwan-based semiconductor firms announced plans to invest $250 billion in the U.S. to boost chip, energy, and AI production. The president also promised to invest an additional $250 billion in credit to boost investment.
“The amount of investment that is happening in Arizona right now from Taiwanese firms, especially TSMC, is impressive. We are the envy of other states, and we want to continue to see that growth.”
-Ruben Gallego, Senator of Arizona.
Cryptopolitan previously reported that the U.S. agreed last week to lower export tariffs on goods from Taiwan from 20% to 15%. Gallego became the first U.S. official to meet Taiwan’s president in person since both countries settled the trade negotiations.
Under the new tariff agreement, Washington imposed lower levies on imports of semiconductors or related manufacturing equipment and products for chipmakers like TSMC that invest in the U.S. Semiconductor firms will also be able to import some items duty-free.
Vice Premier Cheng Li-chiun told reporters earlier this week that the trade agreement was not about hollowing out Taiwan’s chip industry. He argued that the sector is crucial to the country’s economy, which he said is widely referred to as the “sacred mountain” protecting Taiwan.
U.S. tariff deal aims to support Taiwan’s high-tech industries
Cheng also acknowledged that the deal will not relocate the supply chain but will instead support the country’s high-tech industries to boost their foreign investment.
The Taiwanese politician revealed that the trade agreement will enable semiconductor firms that expand in the U.S. to import up to 2.5 times their new capacity of chips and wafers with no extra tariffs during an approved construction period. He also said that such chipmakers as TSMC would receive preferential treatment for chips that exceed that quota.
Cheng revealed that the country has secured preferential treatment under any future Section 232 measures on semiconductors. The measures are part of an ongoing U.S. national security investigation into imports of key products like advanced computing chips, steel, and automobiles.
He also believes the actual Section 232 semiconductor tariff could reach 100% in the future, based on what U.S. Commerce Secretary Howard Lutnick said. Cheng acknowledged that the semiconductor rate remains unchanged, but said Taiwan has already ensured that the U.S. will grant the country zero tariffs within the quota and preferential tariffs outside the quota, regardless of any future tariff scenario.
Lutnick said last week that Washington will impose 100% tariffs on companies that do not build in the U.S. Cheng also cited past efforts to help the international community during crises as an example of the country’s support.
Cheng hopes that Taiwan and the U.S. can lead in the future through partnerships under the wave of artificial intelligence adoption. He also stated that Taiwan’s strategic objective is to work together with the U.S. to build a high-tech supply chain for the democratic camp.
