tsmc boosts us investment to $165 billion amid taiwan tensions

2025-03-06 tsmc

taipei, Thursday, 6 March 2025.
tsmc’s investment in the us has increased by $100 billion, totaling $165 billion. donald trump says this move strengthens america’s high-end semiconductor production and ensures national security by reducing reliance on taiwan. the expansion plans include multiple new facilities in arizona, generating thousands of jobs. some analysts suggest tsmc’s decision is influenced by trump’s tariff threats on taiwanese chips and aims to secure a favorable relationship with the new administration. taiwanese officials express concern about the potential impact on their own semiconductor industry.

Stock reaction and market analysis

Following the announcement of increased US investment, TSMC’s stock experienced a dip, with shares falling 1.96% on Tuesday [4][5]. This reaction underscores concerns in Taiwan regarding the potential erosion of its semiconductor industry leadership [3][4]. Despite these concerns, TSMC maintains that its investment strategies in Japan and Taiwan will remain unaffected [4]. Analysts suggest the expansion is a calculated move to align with customer demands and address geopolitical considerations, potentially fostering a more resilient global supply chain [1][2].

manufacturing capacity and expansion

TSMC’s bolstered investment aims to establish three additional chip factories, alongside two advanced packaging facilities and a research and development center in the US [3][4]. This expansion builds upon the existing plans for three wafer fabs in Arizona, with the first already producing 4-nanometer chips [1][2][3]. The company anticipates commencing production of 2-nanometer chips in Arizona by 2028 [2]. These facilities are poised to support the production of AI and smartphone chips, catering to major US clients like Nvidia, Qualcomm, and Apple [4].

geopolitical implications and taiwan’s concerns

The move has sparked worries in Taiwan, with some fearing TSMC could become a ‘US chipmaker,’ potentially draining Taiwan’s industrial advantages [3][4]. Former Taiwanese President Ma Ying-jeou expressed concerns over national security, urging unity to safeguard TSMC [3]. Analyst Bonnie Glaser notes that Taiwan hopes the investment commitment will strengthen US-Taiwan relations [2]. Concerns also extend to the broader impact on Southeast Asian countries, given the region’s growing semiconductor exports [3].

trump’s influence and us strategic goals

Trump has repeatedly emphasized the need for the US to manufacture its own chips for national security reasons [1][4]. He has also suggested that TSMC’s US-based production would shield the company from potential tariffs [2][4]. Some analysts believe Trump’s administration used the threat of tariffs to pressure TSMC into increasing its US investments [5]. US Commerce Secretary Howard Lutnick highlighted that while the Biden administration provided subsidies, Trump’s policies played a significant role in securing TSMC’s additional investment [5].

expert opinions and long-term outlook

AMD CEO Lisa Su lauded TSMC’s investment as ‘extremely important’ for the US semiconductor industry [2]. Chris Miller, author of Chip War, suggests TSMC aims to establish a productive relationship with the Trump administration through this investment [2]. Gu Wenjun, chief analyst at芯谋研究, notes that while the investment may lead to some transfer of advanced processes, the impact on Taiwan will likely materialize in the coming years [4]. Wang Xinshi, associate professor of economics at National Chengchi University, posits that investing in the US might be TSMC’s best option, given the trend of advanced manufacturing returning to the US [4].

Bronnen

geopolitical risk us investment