# **TSMC’s $100 Billion Investment in the US: A Reaction to Trump’s Semiconductor Tariff Threats?**
## **Introduction**
The Taiwan Semiconductor Manufacturing Co. (TSMC), recognized as the premier chip producer globally, is reportedly preparing for a monumental $100 billion investment in the United States. This initiative aligns with former President Donald Trump’s vocalized desires for domestic semiconductor manufacturing and his threats regarding tariffs on imported chips. While official confirmation of the deal is pending, sources suggest that an announcement from Trump is imminent.
This occurrence provokes inquiries regarding whether TSMC’s choice represents a calculated business strategy or a response to Trump’s assertive trade approaches. It also underscores the ongoing competition for semiconductor supremacy between the US and Asia, especially Taiwan.
## **TSMC’s US Expansion**
TSMC’s financial commitment to the US isn’t unprecedented. The firm initially revealed its plans for a semiconductor fabrication facility (fab) in Arizona in 2020, with a starting investment of $12 billion. Over time, this investment has experienced substantial growth:
– **2022:** TSMC raised its US investment to $40 billion.
– **2024:** The company secured **$6.6 billion in direct funding** through the CHIPS Act to aid its Arizona fabs.
– **2025:** Reports indicate a fresh $100 billion investment plan with Trump.
The US government has long aimed to enhance domestic semiconductor manufacturing, seeking to lessen dependence on Asian suppliers. The CHIPS Act, enacted in 2022, was a critical stride toward this goal, extending subsidies and incentives to chipmakers willing to establish fabs in the US.
## **Trump’s Tariff Threats and Their Effects**
Trump has persistently advocated for increased semiconductor production within the US, asserting that reliance on Taiwan and South Korea poses risks to both economic and national security. During his 2024 campaign, he proposed a **25% or greater tariff on semiconductor imports**, a strategy that could have drastic consequences for companies like TSMC, which primarily produces its most advanced chips in Taiwan.
In February 2025, Trump reaffirmed this position, asserting:
> *”We need chips manufactured in this country. Currently, nearly everything is produced in Taiwan, almost all of it, with a small portion in South Korea. But we want those companies to relocate to our country.”*
The potential for tariffs may have swayed TSMC’s resolution to broaden its US operations. Should Trump implement these tariffs, companies dependent on imported chips could incur higher expenses, making local production a more appealing alternative.
## **The Role of the CHIPS Act**
The CHIPS Act was intended to enhance US semiconductor manufacturing by offering financial incentives to firms like TSMC, Intel, and Samsung. Under the Biden administration, the act aimed to position the US as a frontrunner in global chip production, targeting the achievement of **20% of the world’s leading-edge semiconductors by 2030**.
However, Trump has condemned the CHIPS Act, labeling it as an extravagant government initiative. Some industry analysts worry that should Trump regain power, he might cut funding for the act, putting current semiconductor projects at risk.
A report from Semiconductor Advisors cautioned:
> *”If I were managing a chip company, I would be cautious about relying on CHIPS Act funding, even with a signed agreement.”*
If the CHIPS Act’s funding decreases, firms may have to depend more on private funding and government negotiations, including the speculated $100 billion deal between TSMC and Trump.
## **Implications for the Semiconductor Sector**
TSMC’s enlarged investment in the US could have notable ramifications for the global semiconductor landscape:
1. **Boosted US Chip Production:** If TSMC’s new fabs become operational, the US could lessen its dependency on Taiwan for advanced chips, reinforcing its role in the global semiconductor arena.
2. **Possible Trade Strains:** Should Trump enact tariffs, it could complicate US-Taiwan relations and affect global supply chains.
3. **Effects on Tech Corporations:** Major American tech companies like Apple, AMD, Nvidia, and Qualcomm, which depend on TSMC for chips, may need to reconsider their supply strategies.
4. **Job Creation:** An investment of $100 billion would likely generate thousands of jobs within the US semiconductor industry, stimulating the economy.
## **Conclusion**
TSMC’s rumored $100 billion investment in the US signifies a major turning point in the semiconductor field. Although the agreement awaits formal confirmation, it seems to be a reaction to Trump’s tariff threats and the wider initiative for semiconductor self-sufficiency in the US.
As the global chip competition heats up, the upcoming months will determine whether this investment is a long-term strategic maneuver or a fleeting response to political influences. Regardless, the landscape of semiconductor manufacturing in the US is poised for significant transformation.
