Taiwan Semiconductor Manufacturing Company (TSMC) has said it will spend a huge $100 billion in the United States. The investment includes constructing five new plants within a couple of years. TSMC CEO C.C. Wei announced the move at the White House in the presence of U.S. President Donald Trump on Monday.
Why is This Important?
The majority of the world’s semiconductors (tiny chips for use in electronics) are produced in Asia, especially Taiwan. The U.S. government hopes to have more made domestically to decrease dependence on foreign suppliers. This investment will make national security stronger and enable American technology companies to obtain chips quicker and more reliably.
President Trump stated, “We must be able to build the chips and semiconductors we need right here in America.”
What Will TSMC Build?
The investment will be used to fund:
- Three new semiconductor fabrication facilities
- Two advanced packaging facilities (where chips are completed before use)
- A new research and development (R&D) center
These plants will be constructed in Arizona, where TSMC already has a foothold.
Job Creation and Economic Impact
TSMC’s growth will generate 40,000 construction jobs in the next four years. When the factories are up and running, thousands of new high-tech positions will be created for engineers, researchers, and factory workers.
Nonetheless, TSMC has not revealed a precise time frame by which the new facilities will become operational. Its first Arizona plant encountered delays, yet the company initiated production in 2024.
Impact on U.S. Tech Companies
TSMC is a key supplier to American firms such as Apple, Nvidia, Qualcomm, and AMD. Increased chip manufacturing in the U.S. will enable these firms to stay clear of supply chain disruptions.
Reports also indicate that Intel, a struggling American chipmaker, may gain from TSMC’s presence. The Trump administration is said to be exploring options for TSMC to invest in Intel’s factory unit to enable it to compete with competitors.
A Central Component of Trump’s Economic Policy
TSMC’s investment is one of a wave of large financial commitments by international businesses in the U.S. In February, Apple revealed a $500 billion investment strategy, and SoftBank and billionaire Hussain Sajwani have also committed billions.
The investment fits with Trump’s economic policy, which centers on building American jobs and increasing U.S. manufacturing.
Government Assistance and CHIPS Act
The government of the U.S. is providing semiconductor companies with incentives through the CHIPS and Science Act. Enacted in 2022, the act offers $52.7 billion subsidies to enhance chip manufacturing within the country.
In 2024, the U.S. Commerce Department authorized a $6.6 billion subsidy to assist TSMC in constructing factories in Phoenix, Arizona. This new $100 billion investment could be eligible for further government tax credits.
Issues Regarding Taiwan and China
Advanced chips are produced in Taiwan, but there have been tensions regarding China’s claim. China has claimed Taiwan as its own, but Taiwan firmly disagrees with this assertion.
By transferring the production of chips to the U.S., TSMC can minimize risks from international political disputes. With this action, it also comforts American businesses that they will enjoy a safe chip supply in the future.
TSMC’s Long-Term Plans in the U.S.
Last year, TSMC announced plans to build a second Arizona factory using the world’s most advanced 2-nanometer chip technology. Production at this factory is expected to start in 2028.
TSMC has already started producing 4-nanometer chips for U.S. customers in Arizona. These advanced chips power AI systems, smartphones, and high-performance computers.
Challenges and Future Outlook
Although this investment is a great leap for America’s semiconductor sector, there are still challenges ahead. Constructing and operating such high-tech facilities takes special engineers and technicians. The U.S. needs to educate more workers in order to match demand.
In addition, it takes years to construct semiconductor factories and they demand enormous energy and water supplies. Arizona’s water deficit may prove to be a problem for the long-term operations.
In spite of these hurdles, TSMC’s $100 billion investment is a significant change for the industry. It fortifies the U.S. economy, generates employment, and provides for a stable supply of sophisticated chips among American businesses.
