Trump and TSMC announce $100 billion plan to build five new US factories

WASHINGTON: Taiwanese semiconductor company TSMC plans to make a fresh $100 billion investment in the United States that would involve building five additional chips facilities in the country in coming years, its CEO announced with U.S. President Donald Trump on Monday.

Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker and a leading supplier to major U.S. hardware manufacturers, announced the plan as CEO C.C. Wei met with Trump at the White House.

"We must be able to build the chips and semiconductors that we need right here," Trump said. "It's a matter of national security for us."

TSMC said the expansion includes plans for three new chips fabrication plants, two advanced packaging facilities and a major R&D center.

The $100 billion outlay, which would boost domestic production and make the United States less reliant on semiconductors made in Asia, is in addition to an investment announced last April, when TSMC said it would expand its planned U.S. investment by $25 billion to $65 billion and add a third Arizona factory by 2030.

TSMC did not give a timeline for any of its new investments, other than saying it would create 40,000 construction jobs over the next four years. Construction on its first Arizona plant was plagued by delays, though the company eventually began chip production on time in 2024.

As a key manufacturing partner to Nvidia, Qualcomm and Advanced Micro Devices, TSMC is central to the U.S. chip industry, and bringing more of its production to U.S. soil would solve a major supply chain risk for those firms.

And the company could also play a central role in saving rival IntelINTC.O. Earlier this year, Trump administration officials met with Wei in New York about taking a majority stake in a joint venture in Intel's factory unit, as part of a deal in which several chip firms would take a stake in the venture, according to a source familiar with the matter. Intel did not respond to questions about the meetings.

For Trump, the announcement helps show voters he is fulfilling his campaign pledge to do more to bolster domestic industries and create jobs.

It is the latest in a string of such developments. In February, Apple said it would invest $500 billion in the next four years, although much of that was routine spending. Emirati billionaire Hussain Sajwani and SoftBank also have promised multi-billion dollar investments in the U.S.

TSMC said on Monday it looks "forward to discussing our shared vision for innovation and growth in the semiconductor industry, as well as exploring ways to bolster the technology sector along with our customers."

CHIPS ACT

The first Trump administration brought TSMC to Arizona in 2019 and introduced legislation that would later become the CHIPS and Science Act, passed in 2022 under President Joe Biden to provide $52.7 billion in subsidies for American semiconductor production and research.

Last year, the U.S. Commerce Department finalized a $6.6 billion government subsidy for TSMC to produce semiconductors in Phoenix, Arizona, while the $100 billion announced on Monday would be eligible for a 25% manufacturing investment tax credit under the 2022 law.

Under Biden, the Commerce Department convinced all five leading-edge semiconductor firms to locate factories in the U.S. as it sought to address national security risks from imported chips.

Taiwan's dominant position as a maker of chips used in technology from cellphones and cars to fighter jets has sparked concerns of over-reliance on the island, especially as China ramps up pressure to assert its sovereignty claims.

China claims Taiwan as its territory, but the democratically elected government in Taipei rejects Beijing's sovereignty claims.

Commerce Secretary Howard Lutnick said on Monday that TSMC and other companies are investing in the United States and want to avoid Trump's new tariffs.

Lutnick told lawmakers in January that the Biden-era program was "an excellent down payment" to rebuild the sector, but he has declined to commit grants that were approved by the department under Biden, saying he wanted to "read them and analyze them and understand them."

A TSMC spokesperson said last month the company had received $1.5 billion in CHIPS Act money before the new administration came in as per the milestone terms of its agreement.

TSMC last year agreed to produce the world's most advanced 2-nanometer technology at its second Arizona factory, expected to begin production in 2028. TSMC also agreed to use its most advanced chip manufacturing technology called "A16" in Arizona.

TSMC has already begun producing advanced 4-nanometer chips for U.S. customers in Arizona.

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