According to a report from Bloomberg, Taiwan’s government reportedly toned down worries about Taiwan Semiconductor Manufacturing Co.’s (TSMC) plans to invest another $100 billion in the US, potentially leading a more Americanized version of the chip-making giant.
On Tuesday, Minister of Economic Affairs Kuo Jyh-Huei told reporters the company already has plants in the US and Japan and that Germany will soon join the list.
“These have nothing to do with tariffs,” the minister said. “TSMC’s global expansion is a crucial development.”
What Trump expects from the move
TSMC revealed plans to expand its business in the US on Monday when Chief Executive Officer C.C. Wei joined US President Donald Trump at the White House.
The president, who has been working hard to prove that the American people voted well, is seemingly pleased with TSMC’s decision as it aligns with his vision of attracting investors to build in America. As far as he is concerned, the move means “the most powerful AI chips in the world will be made right here in America.”
Even though this is a great deal for America, some don’t think the same can be said for Taiwan, as its place in the chip supply chain becomes endangered if it shifts production offshore.
When asked if the supply chain could move to the US, Kuo expressed doubt. “The manufacturing in the US is primarily for the American clients, in Japan for Japanese clients, and in Taiwan for customers from various other countries,” he said. “Judging from the scale of the investment and the suppliers it requires, it’s unlikely the entire supply chain will shift from Taiwan in the long run.”
The announcement comes at a crucial time
Chipmaking giant Taiwan Semiconductor Manufacturing Company plans to invest at least $100 billion to grow its US operations, according to an announcement from Trump. The president was joined on Monday at the house by the firm’s CEO C.C. Wei, Commerce Secretary Howard Lutnick, and White House AI and Crypto Czar David Sacks.
The announcement is in line with Trump’s commitment to encourage companies to invest in American manufacturing. TSMC’s investment will contribute to building three advanced chipmaking fabrication plants — in addition to the one already running in the country, two others are in the works in Arizona — and is expected to create lots of jobs.
TSMC will also build two advanced packaging facilities, where smaller chips get assembled into more powerful systems, and a research and development center, said the company on Monday.
This means that TSMC will have a total of six US fabrication plants, including the additional facilities. That’s one more than Trump previously indicated there would be during Monday’s event.
“Monday’s announcement brings TSMC’s US investments to around $165 billion. This is a tremendous move by the most powerful company in the world. It’s a matter of economic security, it’s also a matter of national security for us,” Trump said before adding that it would also help TSMC diversify away from chipmaking in Taiwan.
Trump also claimed that the TSMC investment, among others, could bring the United States to 40% of the global chipmaking market, although it would take years to achieve this.
“We’re going to produce many chips to support AI progress and to support smartphones progress,” Wei said at the event on Monday. He also thanked TSMC’s loyal customers such as Apple, Nvidia, AMD and Qualcomm.
These companies, especially Nvidia, are already getting ready to evolve with the new development.
“TSMC’s new fabs will be the foundational pillar of a new technology supply chain centered in the United States,” an Nvidia spokesperson said in a statement after the announcement, adding the company “will fully utilize TSMC’s global manufacturing network to enhance our supply agility and resilience.”
Companies have promised to invest billions in the US in the coming years
TSMC is the latest tech company that has vowed to invest billions of dollars into the United States.
Last week, Apple revealed plans to invest $500 billion to expand facilities, manufacturing and projects across the United States over the next four years. It is great news but some have speculated that the announcement was an attempt to help avoid new tariffs on goods imported from China. There are claims some of the investment efforts were likely even already underway.
Oracle, OpenAI, and SoftBank are also teaming up to launch the Stargate project. They announced this in January and said its main purpose is to develop artificial intelligence infrastructure in the United States. As a team, the companies will invest $500 billion into the project over the coming years.
Besides the new $100 billion pledge it made, TSMC will also honor its promise to invest $12 billion to build an advanced semiconductor factory in Arizona. The plans were made in 2020, amid concerns from the first Trump administration that America’s reliance on chipmakers in Asia had become a national security threat. However, TSMC’s US efforts received a big boost under President Joe Biden, thanks to his CHIPS and Science Act, which helped fund investments in American chipmaking.
While Biden was president, TSMC already said it would build two additional Arizona plants and increase its investment in the state to $65 billion, although at least one of those new facilities has faced delays. Meanwhile Apple revealed last month that it had started to receive advanced chips from TSMC’s first Arizona plant.
Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now
