tsmc doubles down: $100 billion us expansion amid trump's push for domestic chip dominance

2025-03-04 tsmc

Phoenix, Tuesday, 4 March 2025.
tsmc is significantly increasing its investment in the united states. The company plans to invest an additional $100 billion over the next four years. This investment aims to construct advanced chip manufacturing facilities. Chairman mark liu is set to meet with president trump. The discussion will cover plans for three new wafer fabs, two advanced packaging plants in arizona, and a research and development center. This brings tsmc’s total investment in the u.s. to $165 billion, solidifying its commitment to american semiconductor production.

investment details and strategic implications

The new $100 billion investment will support the construction of three new chip manufacturing plants, two advanced packaging facilities, and a research and development center in Arizona [1][2]. TSMC’s CEO, C.C. Wei, joined President Trump at the White House to reveal the expansion plans [7]. Trump stated that the most powerful AI chips in the world would be manufactured in America because of this investment [7]. The expansion will increase TSMC’s footprint in Arizona from three to five manufacturing plants and create 25,000 jobs [2]. TSMC’s initial investment in Arizona began in 2020 [7].

geopolitical motivations and tariff avoidance

The investment is seen as a strategic move to mitigate geopolitical risks and avoid potential tariffs [5][1]. Commerce Secretary Howard Lutnick noted that TSMC’s presence in the U.S. helps them avoid tariffs they would otherwise incur [4]. President Trump stated that chips manufactured in the U.S. would not be subject to the 25% to 30% tariffs that could apply if they were produced in Taiwan [3]. Some analysts believe the expansion responds to increasing demand and geopolitical considerations [5].

chips act support and government incentives

TSMC’s expansion is partially driven by government incentives, including the CHIPS Act [5]. The CHIPS Act provides direct subsidies and tax benefits valued at $6.6 billion to TSMC [1]. TSMC had already received $1.5 billion of its total CHIPS Act award [4]. This financial support aims to bolster the U.S. semiconductor industry and reduce reliance on overseas manufacturing [2][5]. The Biden administration had advanced efforts by passing the CHIPS Act, which provided $39 billion in federal funding [2].

impact on tsmc’s market leadership and competition

TSMC’s increased U.S. presence is expected to strengthen its market leadership in advanced chip manufacturing [2]. TSMC makes approximately 90% of the world’s most cutting-edge chips for major clients like Nvidia and Apple [4]. This expansion aims to secure a larger share of the global chip manufacturing market for the United States [1]. President Trump has set a goal for the U.S. to capture 40% of the global chip manufacturing market [1]. The first Arizona factory has been mass-producing chips since January 2025 and employs 3,000 workers [4].

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us expansion chip manufacturing