trump's chips act threat: tsmc's $165 billion us investment at risk?

2025-03-18 tsmc

Washington, Tuesday, 18 March 2025.
former president trump is considering abolishing the chips act. this move could imperil tsmc’s massive $165 billion investment in us manufacturing. such a repeal would force tsmc to rethink its expansion strategy. this could significantly impact tsmc’s stock value. analysts are now closely watching these potential policy shifts. the shifts may have implications for tsmc’s global operations. senator todd young expressed his surprise at trump’s stance, calling the chips act “one of the greatest successes of our time”.

Chips act under fire

Former President Trump has criticized the CHIPS and Science Act, calling it a “horrible, horrible thing” [2]. He suggested the act should be eliminated and any remaining funds be used to reduce the national debt [2]. Trump’s stance has sparked debate, particularly given the act’s aim to bolster domestic semiconductor manufacturing and reduce reliance on foreign suppliers [2]. The CHIPS Act, enacted to enhance U.S. competitiveness in the semiconductor industry, is projected to grow to approximately $1 trillion by 2030 [2].

tsmc’s investment and expansion plans

TSMC, a leading chip manufacturer, has committed to investing $165 billion in advanced semiconductor manufacturing in the U.S. [2]. This includes plans to build three chip factories, two advanced packaging facilities, and a research center [5]. TSMC Chairman Wei Zhejia announced an additional $100 billion investment in the U.S. with Trump present at the White House [1][5]. However, the potential repeal of the CHIPS Act introduces uncertainty regarding these ambitious expansion plans [1].

impact on manufacturing capacity and jobs

The Semiconductor Industry Association estimates that the CHIPS Act will create over 145,000 manufacturing and construction jobs [2]. These projects are expected to significantly increase the demand for extended-stay hotels nationally [2]. The potential loss of these investments could affect not only the semiconductor industry but also related sectors such as construction and hospitality [2]. Senator Chuck Schumer noted that people are already experiencing positive impacts from the CHIPS Act [2].

geopolitical risks and market leadership

Trump’s stance reflects a broader strategy of using tariffs and trade policies to compel industries to return to the U.S. [7]. Scrapping the CHIPS Act could lead to higher tariffs, potentially disrupting global supply chains and impacting TSMC’s competitive position [7]. Some analysts believe that Trump’s policies are aimed at impeding China’s technological advancements, even if it means potential economic stagnation for the U.S. [7]. Concerns remain about the potential transfer of advanced technologies from Taiwan to the U.S. [6].

expert views and market reactions

The market’s reaction to these policy uncertainties remains mixed. Some experts suggest that shifting investments to Chinese and Hong Kong stocks might be a viable alternative for investors [7]. Others point out that the strong rebound in these markets is due to years of undervaluation and improving investor confidence [7]. Concerns about the uncertainty of trade policies and a possible fading of the artificial intelligence boom could put considerable selling pressure on U.S. stocks [7].

Bronnen

chips act policy risk