TSMC Expands U.S. Chip Investment to $165B, Trump Announces

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest semiconductor maker, will invest an additional $100 billion in U.S. chip manufacturing, President Donald Trump announced Monday. This new investment is in addition to the $65 billion the company had previously committed.

Speaking at the White House alongside TSMC CEO C.C. Wei, Trump called the investment “tremendous” and emphasized the importance of domestic chip production for economic and national security.

“Semiconductors are the backbone of the 21st-century economy. And really, without the semiconductors, there is no economy,” Trump said. “Powering everything from AI to automobiles to advanced manufacturing, we must be able to build the chips and semiconductors that we need right here in American factories with Americans skill and American labor.”

TSMC’s Expansion Plans in Arizona

TSMC, which supplies chips to Apple, Intel, Nvidia, and other major companies, has already been constructing three factories in Arizona, supported by federal subsidies from the Biden administration’s CHIPS and Science Act. TSMC's first Arizona factory has begun large-scale production of its advanced 4-nanometer chips, a key component in smartphones, AI processors, and data centers.

With this additional $100 billion, TSMC will build:

• Three more chip manufacturing plants in Arizona.

• Two packaging facilities to support advanced semiconductor production.

According to Wei, the total $165 billion investment will generate thousands of high-paying jobs and strengthen the U.S. semiconductor supply chain.

“This investment is going to create thousands of high-paying jobs,” Wei said.

Trump’s Approach to Chip Manufacturing

The CHIPS and Science Act, signed by former President Joe Biden in 2022, allocated $280 billion to boost U.S. chip production after the COVID-19 pandemic exposed supply chain vulnerabilities. Factory shutdowns abroad led to shortages in automobiles, electronics, and AI hardware, driving inflation.

While the Biden administration’s strategy focused on government subsidies, Trump has taken a different approach, emphasizing tariffs and private-sector-driven investment.

• Tariff Threats: Trump has suggested high tariffs on imported semiconductors to encourage domestic production.

• Federal Incentives: He has questioned the need for government subsidies, arguing that companies like TSMC will invest regardless.

“It’s the incentive we’ve created. Or the negative incentive,” Trump said, referring to his tariff policies.

Additionally, as part of Trump’s efforts to shrink the federal workforce, 40 Commerce Department employees working on CHIPS Act implementation were fired on Monday, according to sources familiar with the move.

Geopolitical Implications: U.S.-Taiwan Relations

Trump was asked whether this investment would reduce the risk of supply chain disruptions if China were to isolate or seize Taiwan. Taiwan has governed itself independently since separating from mainland China in 1949 after a civil war.

“I couldn’t say ‘minimize’ because that would be a catastrophic event, obviously,” Trump said. “It will at least give us a position where we have, in this very, very important business, we would have a very big part of it in the United States”

Taiwan has long been at the center of U.S.-China tensions. Beijing considers the island part of its territory and has increased military and diplomatic pressure on Taiwan’s leadership.

The Taipei Economic and Cultural Representative Office, Taiwan’s de facto embassy in the U.S., welcomed the announcement.

“Investments by Taiwanese businesses in the U.S. have exceeded 40% of the island’s total foreign investments,” the office said. “We are glad to see Taiwanese businesses expand their investments in the U.S. and deepen cooperation on supply chain between the two sides.”

Bonnie Glaser, managing director of the Indo-Pacific program at the German Marshall Fund, said Taiwan likely hopes this investment will strengthen its relationship with the U.S.

“Taiwan is evidently stepping up in a way that supports and advances President Trump’s priorities,” she said. “The U.S. will benefit greatly from TSMC’s investment.”

Trump has not yet outlined his position on Taiwan’s security and has previously stated that Taiwan should pay the U.S. for military defense support.

Trump’s Business-Friendly Strategy

Since taking office in January, Trump has hosted multiple business leaders at the White House to promote foreign and domestic investments that align with his economic strategy.

Other major investment announcements under his administration include:

• $500 billion AI infrastructure investment from OpenAI, Oracle, and SoftBank in January.

• $20 billion AI data center investment from DAMAC Properties (UAE) in January.

• $500 billion U.S. expansion by Apple, announced after CEO Tim Cook met with Trump at the White House last week. Trump joked that his schedule was too full to personally announce all the major deals.

“I don’t have time to do all of these announcements,” he said.

What This Means

TSMC’s $100 billion expansion reinforces the U.S.’s commitment to semiconductor independence, especially amid geopolitical uncertainties. The move aligns with Trump’s pro-business, tariff-heavy approach, contrasting Biden’s subsidy-driven CHIPS Act strategy.

If successful, the investment could:

• Strengthen U.S. supply chains, reducing dependence on Taiwanese and Chinese chip production.

• Create thousands of high-paying jobs in Arizona’s growing tech sector.

• Position the U.S. as a major global hub for advanced chip manufacturing.

With TSMC’s massive investment underway, all eyes will be on how it reshapes the U.S. semiconductor landscape in the years ahead. However, geopolitical tensions with China remain a wildcard, and Trump’s stance on Taiwan’s security is still unclear.

Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.