Trump’s PR has cranked up that TSMC has announced a substantial expansion of its investment in the United States, committing an additional $100 billion to build five new semiconductor fabrication plants in Arizona. This investment, which brings TSMC's commitment to the state to $165 billion, underscores its strategic move to bolster its manufacturing footprint in the US.
TSMC's expanded US investment was announced jointly with Trump, who hailed it as a significant boost to the American economy. The initiative is expected to support approximately 40,000 construction jobs over the next four years and create tens of thousands of high-paying, high-tech positions in advanced chip manufacturing, research, and development.
Despite this significant US expansion, TSMC has indicated that its most advanced semiconductor manufacturing processes will continue to be developed and initially deployed in Taiwan.
“Initial deployment of a new process technology requires close collaboration between R&D and production, and new processes will likely be deployed in Taiwan first to ensure they can be successfully ramped up,” TSMC added.
This approach aligns with the Taiwanese government's stance on retaining cutting-edge technology within the country. Officials intend to keep TSMC's most advanced manufacturing capabilities in Taiwan, even as the company expands internationally.
Premier Cho Jung-tai highlighted that the government is closely coordinating with the industry to pursue strategies that serve Taiwan's interests.
Some concerns relocating some of TSMC's manufacturing capabilities to the US could impact Taiwan's strategic "silicon shield," a term referring to the island's critical role in the global semiconductor supply chain.
To make matters worse, Trump is still considering 100 per cent tariffs on chips made in every country which is not the Land of the Fee including Taiwan.
These potential tariffs aim to encourage companies like TSMC and their American clients to invest in US-based manufacturing to bypass such trade barriers. However, it is more likely to double the cost of chips to US customers while keeping the prices low for the rest of the world.
In fact a cynic would suggest that if TSMC raised the cost of its chips say ten per cent worldwide it could cover any lost sales in the US while still sending the US IT industry into a total spin. It is problematic as it would be difficult for the US IT industry would rely entirely on Intel, which is also relying on TSMC for its latest and greatest chips.
