tsmc speeds up us factory plans amidst tariff turbulence

2025-04-14 tsmc

Taipei, Monday, 14 April 2025.
Amidst president trump’s evolving tariff strategies, tsmc is reportedly accelerating its plans to build us factories. This decision could significantly inflate tsmc’s capital expenditure and potentially squeeze its profit margins. The move is poised to reshape investor confidence and influence stock valuations, marking a pivotal shift in the semiconductor landscape. One report indicates that tsmc may have to pay 165 billion us dollars to get 6.6 billion us dollars in subsidies.

Tariff policy impacts

Donald Trump’s tariff policies are creating uncertainty for businesses [1][7]. The U.S. Customs and Border Protection had announced it would exempt tariffs on many electronic products [1]. However, Trump stated he would provide more details on tariff exemptions for electronics made in China [7]. Three U.S. citizens expressed feeling uncertain due to Trump’s fluctuating tariff policies [7]. These policies are a core measure of Trump’s political vision, causing concerns among economists about a potential global trade war [7].

Financial implications for tsmc

TSMC’s increased investment in U.S. factories could strain its finances [1]. To obtain $6.6 billion USD in subsidies, TSMC might invest $165 billion USD [5]. Initially, TSMC planned a $12 billion USD investment for a 5nm chip factory [5]. Later, with subsidies, TSMC increased its investment to $65 billion USD for three factories [5]. Ultimately, TSMC may invest $165 billion USD for six chip factories, two advanced packaging factories, and a research center in the U.S. [5]. This substantial investment could affect TSMC’s profitability and stock valuation [1].

Geopolitical risks and market dynamics

China’s new regulations consider the location of wafer production for taxation [3]. Chips made in the U.S. could face a 125% tariff [3]. Some customers have stopped accepting chips with wafers produced in the U.S. [3]. TSMC’s former executive warned that pressuring China could lead to a redefinition of semiconductors [6]. Analyst Tsai Cheng-yuan cautioned TSMC against being complacent amidst the U.S.-China trade tensions [6]. The situation is further complicated by concerns that Taiwan’s high-tech industry is being hollowed out as talent and technology move to the U.S. [8].

Taiwan stock market measures

In response to market volatility, Taiwan’s Financial Supervisory Commission (FSC) extended its restrictions on short selling for another week, until April 18 [2]. This move aims to stabilize the Taiwan stock market amidst uncertainties caused by U.S. tariff policies and international developments [2]. A senior securities analyst noted that extending the short selling ban could improve confidence in the Taiwan stock market [2]. The FSC has implemented such measures five times previously, including during the Asian Financial Crisis and the COVID-19 pandemic [2].

Bronnen

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