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President Donald Trump, in a talk with CNBC yesterday, announced that Taiwan's TSMC is investing $300 billion in the US to build chip manufacturing plants. TSMC's primary investment is in Arizona, where the firm aims to build six new chip fabrication plants through a $165 billion foreign direct investment, which is the largest of its kind in US history. TSMC refused to comment on the President's remarks, while its shares suffered in the Taiwan and American stock markets after Trump's statements.
TSMC Shares Slip After Trump Outlines $300 Billion US Investment
The president made the remarks as he discussed his trade negotiations with Europe and Asian countries. Trump outlined that countries such as South Korea and Germany were opening up their markets for US products. He added that his administration plans to announce new tariffs soon, on sectors such as pharmaceuticals and semiconductors. Trump pointed out that Switzerland made a fortune with pharmaceuticals, and he would announce additional, sector-specific tariffs on this industry soon.
He then shifted to semiconductors, stating that "we are going to be announcing on semiconductors and chips, which is a separate category, because we want them made in the United States." While TSMC is investing billions of dollars into US chip production, the bulk of the world's leading-edge chip fabrication is concentrated in Taiwan and in South Korea, partly due to Intel's struggles with its high-end chip manufacturing.
The latest bout of US trade negotiations has also reignited rumors of a Taiwanese investment in Intel. Such rumors were rife earlier this year, with several sources claiming that TSMC might set up a joint venture with Intel to bail out the latter from its chip manufacturing difficulties. However, a Taiwanese investment in Intel is unlikely, as the firm's problem isn't a lack of funds but the inability to execute advanced manufacturing technology.
After outlining potential new semiconductor-specific tariffs, Trump mentioned TSMC and its US investment. The president said, "And by the way, they're being made in the United States. We have the biggest in the world, as you know, from Taiwan is coming over and spending 300 billion dollars in Arizona, building the biggest plant in the world for chips and semiconductors."
TSMC expanded its initial $65 billion investment in the US by $100 billion earlier this year in a joint announcement with the president. The initial $65 billion package included three chip fabrication facilities, and TSMC added three new plants through its $100 billion upgrade.
As part of the latter announcement, the firm expects $200 billion in additional economic benefits throughout the US over the next decade. However, it is unclear whether the president's remarks, which highlighted a $300 billion figure, include these economic benefits as well.
Considering Trump's comments about impending semiconductor tariffs, the president might be hinting at additional revenue that he aims to generate through them.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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