TSMC Pledges to Invest $100B on Chip Manufacturing in the US over 4 Years

Key Takeaways

• Renowned Taiwanese chipmaker TSMC has promised to invest $100 billion in the US over the next 4 years.
• This money will be used for the construction of 3 manufacturing units and 2 packaging units in Arizona.
• The announcement of this investment coincides with Trump's proposed plan to impose higher tariffs on imported chips.

Taiwanese chipmaker TSMC has pledged to invest at least $100 billion over the next 4 years in chip manufacturing plants in the US. This money will be used for the construction of three new manufacturing and two packaging facilities across Arizona.

This was announced in a news conference by President Donald Trump on Monday, where he was joined by TSMC chairman and CEO C. C. Wei.

We are going to produce many AI chips...to support AI progress - Dr. C. C. Wei

TSMC's Collaboration with the US

This isn't the first time TSMC is investing in the US. The company had previously invested $65 billion in creating US-based fabrication plants, bringing its total investment in the US to $165 billion.

TSMC also received a $6.6 billion grant from the CHIPS Act during Biden's tenure. This money was used to construct 3 fabrication plants in Arizona, one of which is already functional and churning out 4-nanometer chips.

Note: The CHIPS Act was introduced by Joe Biden to boost domestic research and manufacturing of semiconductors.

TSMC has a friendly history with the US, but the timing of this new investment is interesting nonetheless.

Previously, Trump had expressed concerns over TSMC's dominance in the chip manufacturing industry and urged the company to expand its manufacturing base to the US. This coincides with the president's recent announcement that he might impose higher tariffs on imported chips.

While some experts have criticized the tariffs move, I believe it could be one of the reasons why TSMC decided upon such a massive investment in the US. We're essentially seeing the exact same thing here as we did when Apple announced a massive $500 billion investment plan for the US.

Taiwan's Stance on This Deal

While this collaboration is a huge win for both the US and TSMC, Taiwanese citizens are not very happy about it. They're concerned that a deal like this could undermine the island's security.

However, the Taiwanese government has stepped in and assured the people that its most advanced semiconductor technology' will not be passed to the US. They also added that this deal will have to go through extreme scrutiny first, where the interests of all the parties, especially the citizens, will be evaluated.

It's important to note that although the government offices were aware of the deal, TSMC hasn't yet applied for the approval, which is usually required for such massive foreign investment.

TSMC is the biggest chip company in Taiwan, making it important for the small island's economy and security. A lot of people are worried that sharing this technology will weaken their defense. However, on the flip side, Taiwan's defense minister is convinced that the US would protect them.

There's a lot of confusion regarding how this deal will pan out, but it's important to note that the US hasn't explicitly promised any security in exchange for this deal.

The post TSMC Pledges to Invest $100B on Chip Manufacturing in the US over 4 Years appeared first on Techreport.