TSMC expands US investment by $100B

In an apparent effort to placate the Trump administration, TSMC has announced the construction of three fabs, two packaging facilities and an R&D center in the US. Totaling 100 billion dollars, it’s “the largest single foreign direct investment in US history,” according to a press release issued by TSMC following a news conference featuring President Trump and CEO CC Wei at the White House. The investment comes on top of the 65 billion dollars that the Taiwanese foundry had already pledged to spend on US fabs.

Through the massive expansion in the US, TSMC was likely looking to ward off import tariffs. It’s not clear whether that effort has been successful. “By doing it here, he has no tariffs,” President Trump said at the press conference, apparently suggesting tariffs are still on the table for chips made outside the US. TSMC’s move may also been intended to persuade the Trump administration to abandon pressure on the firm to get involved with struggling Intel and to go ahead with the 6 billion dollars in US Chips Act subsidies that have been awarded by the previous administration.

The announcement is light on details. No timeline has been provided about which nodes the new US fabs will be manufacturing and when. The Taiwanese government said it would assist TSMC with its future investments in the US, but also that it won’t allow the most advanced semiconductor technology to move abroad.

TSMC’s manufacturing base in Taiwan traditionally serves as the island nation’s Silicon Shield, ie the notion that Taiwan’s leading role in the global semiconductor supply chain acts as a deterrent against China’s aggression. Apart from (geo)political considerations, TSMC has always insisted on developing and subsequently ramping new nodes at its home base for technological reasons. It’s unclear how the announced American R&D center fits in with that historical stance.