tsmc's $100 billion us investment: more 'intention' than firm 'promise'?

2025-04-02 tsmc

taipei, Wednesday, 2 April 2025.
financial analysts are casting doubt on tsmc’s $100 billion us investment pledge. they suggest it’s more of an ‘intention’ than a binding ‘promise’. this raises questions about the actual amount and timeline. the investment is for expansion in the us. the analysts’ clarification could significantly impact tsmc’s financial stability. it may also impact its strategic approach to growing its presence in the united states. the lack of specifics has investors worried. will tsmc meet trump’s expectations? could us expansion hurt tsmc’s profit margins? tsmc has already purchased land for six us factories.

investor concerns and tsmc’s response

Investors are wary of tsmc’s us strategy [6]. The company’s stock price has fallen over 17% since reaching a high shortly after trump’s january inauguration [6]. Their primary concerns revolve around two key issues. Tsmc might face renewed pressure from trump if it fails to meet his expectations [6]. A large-scale manufacturing expansion in the us could potentially decrease tsmc’s profit margins [6]. Tsmc has been hesitant to disclose details regarding the timeline and specific allocation of the additional $100 billion investment [6].

comparison to previous investments

This lack of detailed information contrasts sharply with tsmc’s initial commitment to expand production in arizona five years ago during trump’s first term [6]. At that time, tsmc provided specific details. These included the start date for factory construction. They also specified the type of process and the projected start of commercial production, along with anticipated chip output [6]. Subsequently, in late 2022, tsmc increased its investment plan to $40 billion, followed by another increase to $65 billion in april 2024, each accompanied by similar detailed disclosures [6].

tsmc’s perspective and market dynamics

Individuals close to tsmc suggest the $100 billion figure is a long-term estimate. They say the white house statement reflects an intention rather than a firm commitment [6]. Tsmc had acquired sufficient land in 2020 to accommodate six wafer plants [6]. According to sources familiar with tsmc’s plans, this land was always intended for future expansion [6]. With the first plant now in commercial production and achieving good yields, tsmc can proceed with future planning [6].

political pressure and investment strategies

Following tsmc’s announcement of an additional $100 billion investment in the us, trump and lutnick are convinced that tariffs on foreign chipmakers can incentivize them to establish us-based facilities [5]. Tsmc has stated that its latest investment is driven by demand in the us market [5]. Trump signed an executive order. It established the ‘us investment accelerator’ within the commerce department. This aims to attract over $1 billion in investments and manage federal funds under the chips act [5].

us chip act and potential delays

Us commerce secretary howard lutnick is considering delaying chip act subsidies [3][5]. He is urging companies to expand their us investment plans, mirroring tsmc’s approach [3][5]. Lutnick aims to secure additional semiconductor investments. He wants to do this without increasing federal funding [3]. His team has suggested canceling already agreed-upon subsidies [3]. Lutnick also intends to broaden the 25% tax breaks in the chip act [3]. This could be more beneficial than direct funding for most firms, but it requires congressional approval [3].

taiwan expansion amidst us investments

Tsmc held an expansion ceremony for its 2-nanometer plant at the kaohsiung nanzi science park on march 31 [7]. Some view this as a sign of tsmc’s commitment to staying rooted in taiwan [7]. Others question the sincerity, with concerns growing about tsmc becoming ‘americanized’ [7]. Tsmc’s co-chief operating officer, chin yung-pei, stated that the kaohsiung 2-nanometer plant, after over two years of construction, is scheduled for mass production in the second half of this year [7].

Bronnen

expansion plans us investment