Trump unveils Taiwanese chip giant's $100B investment in U.S. factories.
Taiwan Semiconductor Manufacturing Co (TSMC), a chip behemoth, would increase its US investment by $100 billion, establishing five new "cutting-edge" fabrication factories on American soil, Donald Trump stated alongside the company's CEO.
Trump stated that the investment means TSMC, which supplies most of the world's most advanced semiconductors, will avoid tariffs he has publicly considered imposing on the global industry as he seeks to bring more manufacturing to the US and assert US trade dominance over rivals and allies.
CC Wei, CEO of Taiwan Semiconductor Manufacturing Co. (TSMC), announced the investment at the White House alongside the president, US Commerce Secretary Howard Lutnick, and David Sacks, a Trump adviser on AI and crypto. He stated that the new investment increased TSMC's overall investment in chip manufacturing in the United States by $165 billion.
"We are producing the most advanced chip on US soil," Wei informed the audience. "Now the vision becomes reality."
Trump dubbed Wei a "legend" and stated that the investment would create thousands of jobs. The president said that bringing chip manufacturing to the United States is an issue of national security and will offer the country a significant portion of the global market.
Taiwan produces the great majority of the world's most advanced semiconductors. It retains most of its production onshore under strict security, which analysts believe increases global incentives to defend Taiwan against Chinese invasion.
"Taking away Taiwan's technology sector will reduce the power of Silicon Shield'," said James Yifan Chen, assistant professor of diplomacy and international affairs at Tamkang University in Taiwan.
On Monday, Trump stated that a Chinese invasion of Taiwan would be a "catastrophic event."
He said investing in TSMC "will at least give us a position where we have a very important business; we would have a very big part of it in the United States."
Taiwan's premier, Cho Jung-tai, said on Tuesday that the participation of numerous businesses in the global supply chain necessitated close collaboration with the government. "Keeping roots in Taiwan and continuing to strengthen Taiwan is the shared stance of the country, government, and industry, and it will remain unwavering," he claimed, according to local media.
Taiwan's government has stated that it will assess the investment, considering "the company's development while ensuring the overall competitiveness of the semiconductor industry and the country."
"The close cooperation in high-tech industries between Taiwan and the United States has made Taiwan the most important partner for the United States in maintaining its leading position in high-tech and technology industries," said Michelle Lee, the cabinet spokesperson.
Su Chi-yen, spokeswoman for Taiwan's Department of Investment Review, told AFP that the government may theoretically veto the investment but that "most past rejections were due to incomplete documentation."
Last April, Wei promised to increase TSMC's projected spending in the United States from $25 billion to $65 billion and add two more plants to its Arizona site by 2030.
TSMC is the world's largest contract chipmaker, and it initially established operations in Arizona in 2020, with manufacturing starting late last year. The company's continued expansion in the United States would increase investment in semiconductor manufacturing at a time when much of the industry is concentrated in Asia.
The chips produced by TSMC are used in almost every aspect of the technology industry, from smartphones and car consoles to servers that run AI.
Lutnick told MPs last month that the program was "an excellent down payment" to restore the industry. Still, he has refused to commit to awards already approved by the department, stating that he wanted to "read them, analyze them, and understand them."
On Monday, Lutnick congratulated Trump repeatedly for increasing chip production in the United States. "Now you're seeing the power of Donald Trump's presidency," he joked.
In November, the US Commerce Department, led by then-President Joe Biden, completed a $6.6 billion government subsidy for TSMC's US semiconductor production plant in Arizona.
In 2022, Biden signed the Chips and Science Act, which provides $52.7 billion in subsidies for American semiconductor production and research, boosting local production and reducing the United States' reliance on Asian semiconductors.
According to a TSMC representative, the company got $1.5 billion in Chips Act funds before the new administration took office, as required per the agreement's milestones.
Last year, TSMC announced plans to develop the world's most advanced 2-nanometer technology in its second Arizona plant, which is anticipated to open in 2028. TSMC also agreed to employ its cutting-edge "A16" chip production technology in Arizona. The TSMC grant included up to $5 billion in low-cost government financing.