TSMC’s $100 Billion Investment in U.S. Shores Up Top Foundry

TSMC will add $100 billion to its investment in the U.S. to start domestic production of AI chips, narrowly dodging tariffs of up to 50% that U.S. President Donald Trump was threatening to levy on imports from the Taiwanese company.

The expansion would build three new chip fabs, two advanced-packaging facilities and an R&D center near Phoenix, Arizona, making the project the largest single foreign direct investment in U.S. history, TSMC said. The company did not provide a timeframe or process technology roadmap for the new investment.

The project underscores TSMC’s support for production in the U.S. for customers including leading AI and tech innovators like Apple, Nvidia, AMD, Broadcom and Qualcomm. Just as TSMC expands, slowing production ramps at rivals Intel and Samsung in the U.S. undermine the nation’s aim to gain a share of up to 40% of the world’s advanced chip production at the 2-nm node, according to analysts who spoke to EE Times.

In 2020, during his first term, President Trump won the initial investment from TSMC in the state of Arizona. The CHIPS Act created during the following Biden administration provided TSMC Arizona $6 billion in stimulus money. Now, despite high production costs and other issues in the U.S., TSMC is nearly doubling its original bet on Arizona.

“This vision is now a reality,” said TSMC CEO C.C. Wei in a prepared statement. “With the success of our first fab in Arizona, along with needed government support and strong customer partnerships, we intend to expand our U.S. semiconductor manufacturing investment by an additional $100 billion, bringing our total planned investment to $165 billion.”

Arizona in production

TSMC said its Arizona fab, which has been in production since late 2024, employs more than 3,000 people on 1,100 acres of land. The expansion will play a crucial role in strengthening the U.S. semiconductor ecosystem by increasing domestic production. TSMC said it will complete the domestic AI supply chain with its first U.S. advanced-packaging investments.

Semiconductors are the backbone of the 21st century economy, President Trump said at a White House event this week with TSMC CEO Wei. Without semiconductors, there is no economy—powering everything from AI to automobiles to advanced manufacturing, he said.  The U.S. must be able to build the chips it needs, he added. 

“Taiwan pretty much has a monopoly on that market,” Trump said. “It’s a matter of economic security. It’s also a matter of national security for us.”

Under the Biden administration, TSMC received a $6 billion grant that encouraged the company to invest $65 billion, U.S. Secretary of Commerce Howard Lutnick said at the event. 

“America gave TSMC 10% of the money to build here,” he said.  “Now you’re seeing the power of Donald Trump’s presidency, because TSMC, the greatest manufacturer of chips in the world, is coming to America with $100 billion. That is backed by the fact that they can come here because they can avoid paying tariffs.”

Ahead of the game

That’s exactly what Wei is doing by building in the U.S., Trump emphasized. 

“Otherwise, they’ll build—if they did them in Taiwan to send them here, they’ll have 25% or 30% or 50% or whatever the number may be someday. It’ll go only up. But by doing it here, he has no tariffs, so he’s way ahead of the game.”

The U.S. will significantly increase its share of the global market for advanced chips with the TSMC investment, Trump said. 

“Worldwide, we had very little,” Trump said. “Almost none. We used to have a lot with Intel. But we had very little. We’ll be at close to 40% of the market with this transaction and a couple of others that we’re doing,” he hinted.

(From left to right) TSMC CEO C.C. Wei, U.S. President Donald Trump and U.S. Commerce Secretary Howard Lutnick. (Source: C-SPAN)

The move by TSMC toward the U.S. may also help de-risk reliance on Taiwan for more than 90% of the most advanced semiconductors, Trump said. Taiwan is at the center of a tech war that is potentially a hot war between China and the U.S. China claims the island nation as part of its sovereign territory.

“It will at least give us a position where we have—in this very important business, we would have a very big part of it in the United States,” Trump told reporters at the event.  “It would have a big impact if something should happen with Taiwan.”

TSMC expands, rivals shrink 

The TSMC expansion comes as its rivals in the chip foundry business are slowing their investments in the U.S. despite billions of dollars in stimulus funding from the CHIPS Act. Samsung has delayed the buildout of its fabs in Texas. Intel has postponed the construction of its “Silicon Heartland” project in Ohio until 2030 or 2031. The U.S. government has stipulated that it may claw back CHIPS Act awards from companies that fail to meet performance milestones.

“By being the clear technology and foundry leader now, TSMC has maximum leverage in terms of making an expanded U.S. operation work and ensuring customers for its U.S. fab capacity, while both Samsung and Intel struggle to land customers and face challenges meeting capex expenditure milestones for their U.S. facilities funding via the CHIPS Act,” Paul Triolo told EE Times. Triolo is SVP for China and technology policy at Washington, D.C.-based consultancy DGA.

Intel and Samsung are slowing their investments because they do not have the customers to support growth, SemiAnalysis analyst Jeff Koch told EE Times.

“All those customers are on TSMC instead,” he said. “The demand for advanced chips is growing, and TSMC is investing to meet it.”

Taiwan’s leadership

By 2030, TSMC will be making more than 300,000 wafers per month in Taiwan at 2 nm and below, according to Handel Jones, CEO of International Business Strategies, which advises electronics companies and investors.   

With the new TSMC investment, 2-nm capacity in U.S. could reach 80,000 wafers per month by that time, or about a quarter of TSMC’s predicted capacity in Taiwan, Jones added.

“TSMC will spend more than $300 billion in Taiwan while spending the $100 billion in the U.S.,” Jones told EE Times. “Advanced technology will be in Taiwan before the U.S.”

TSMC will face the continued systemic problems like worker shortages in the U.S. associated with the rapid ramp-up of the domestic semiconductor industry, Triolo said.

“The problem will be that these investments TSMC is committing to are long-term, multiyear and will require sustained U.S. and local government support in the form of tax credits, workforce development and other grants and incentives that must be maintained beyond the term of this administration,” he said. “TSMC is counting on long-term support from the U.S. Congress and the long-term commitment of the U.S. government for this type of support, based on a read of how concerned the DC foreign policy establishment is about potential conflict with China over Taiwan that jeopardizes global semiconductor supply chains.”

Impossible goal?

The recent announcement that Intel will not run its Ohio facilities until 2030 means that getting to 20% of global advanced-node production by 2030—the goal of the CHIPS Act that former Commerce Secretary Gina Raimondo stressed last year—will be impossible to reach, Triolo said.

Without expansions by Intel and Samsung, the U.S. can likely only support one big cluster for advanced semiconductor production, and it will be in Arizona, Triolo said. Even Arizona will face challenges because of its ties to Taiwan, he added.

“The Arizona cluster will still not do much to reduce the risk posed by conflict over Taiwan between the U.S. and China to global semiconductor supply chains and the entire AI ecosystem,” he said.

If TSMC, Intel and Samsung were to expand their investments in the U.S., the nation could capture as much as 35% of the global market for chips made at the advanced 2-nm node, according to Jones.

“That is good progress,” he said.

The stated benchmark of Trump’s tariff threat and the TSMC investment was to produce 40% of the world’s advanced chips in the U.S., Koch at SemiAnalysis noted.

“This new investment will go a long way towards meeting that goal but still does not solve the issue that Taiwan’s government prohibits offshoring the most advanced logic node,” he added. “The fab capacity in the U.S. therefore will always be at least one node behind, leaving a gap if supply from Taiwan is interrupted.”