Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest semiconductor manufacturer, recently announced plans to invest “at least” $1000 billion in the United States over the next four years to build multiple new chip manufacturing facilities. This announcement was made at a press conference by former US President Trump, with TSMC CEO C.C. Wei stating the investment would primarily focus on factory construction in Arizona.
Wei stated, “We will be producing many AI chips to support the advancement of artificial intelligence.” TSMC had previously pledged $650 billion in US investment and received up to $6.6 billion in subsidies under the CHIPS Act, a Biden administration-backed law aimed at boosting domestic semiconductor production. This new investment brings TSMC's total US chip industry investment to approximately $1650 billion.
The US has expressed concerns for years about TSMC's near-monopoly in chip manufacturing and has urged the company to shift more production lines back to the US. TSMC's expertise in advanced chip packaging technology is crucial for the growing demand for AI chips, especially given the current AI boom.
Since taking office, Trump had expressed intentions to impose tariffs on foreign chip production to boost domestic manufacturing and threatened to terminate the CHIPS Act, deeming it insufficient. However, experts warned that Trump's policies could slow or even harm US progress in AI.
Daniel Newman, CEO of Futurum Group, anticipates that TSMC's investment might be tied to tariff delays or meeting specific requirements, potentially viewed as a “win” for the government. He stated, “TSMC’s significant commitment could be a strategic gesture of goodwill as the US continues to push for increased domestic manufacturing.”
TSMC already has multiple facilities in the US, including the Arizona plant that began mass production last year. Trump and US Commerce Secretary Gina Raimondo had urged TSMC to take over and manage Intel's US chip plants, which face significant logistical challenges.
Since taking office, Trump has frequently joined tech CEOs and investors at the White House to announce large-scale infrastructure projects. In January, OpenAI and SoftBank pledged to build a $500 billion AI data center network in the US. Just last week, Apple also announced plans to invest over $500 billion in the US to expand its manufacturing footprint. However, experts have questioned the feasibility of these commitments.