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Taiwan Semiconductor Manufacturing Company (TSMC) will invest $100bn to expand its chip manufacturing operations in the United States, President Donald Trump announced on Monday. The investment will fund the construction of three new fabrication plants, two advanced packaging facilities, and a research and development centre in Arizona.
The announcement brings TSMC’s total US investment to $165bn since it first committed to building factories in Arizona in 2020. The company is the world’s largest contract chipmaker and a key supplier for firms such as Apple and Nvidia, manufacturing advanced semiconductors used in artificial intelligence, smartphones, and data centres.
Trump called TSMC “the most powerful company in the world” and said the investment was critical for economic and national security. “The most powerful AI chips in the world will be made right here in America,” he said.
TSMC’s US expansion aligns with broader efforts by the Trump administration to increase domestic semiconductor production and reduce reliance on Asian supply chains. Trump has previously accused Taiwan of “stealing” the US chip industry and has proposed tariffs on semiconductor imports to encourage manufacturing in the United States.
Strategic and economic implications
The new facilities are expected to create between 20,000 and 25,000 jobs, according to TSMC CEO C.C. Wei. He said the investment would significantly increase the production of AI chips, which are essential for advances in machine learning and cloud computing.
The expansion is also part of a broader push by the United States to maintain its competitive edge in the global semiconductor industry amid rising tensions with China. Trump said the investment, alongside other manufacturing projects, could help the US control up to 40% of the global chip market.
TSMC’s US-listed shares fell nearly 5% on Monday following the announcement.
TSMC’s growing US footprint
TSMC first committed $12bn to its Arizona operations in 2020 during Trump’s first term. The company later expanded its investment to $65bn with the construction of two additional plants. In 2023, it secured $6.6bn in government subsidies under the CHIPS and Science Act, which was signed by President Joe Biden to boost domestic semiconductor production.
The company’s first Arizona factory is now operational, while a second facility is expected to begin production in 2028. The third site, announced last year, has yet to begin construction.
Tariff pressures and government incentives
The Trump administration has signalled a preference for using tariffs rather than subsidies to drive semiconductor investment. Commerce Secretary Howard Lutnick said the TSMC investment was partly motivated by Trump’s proposed tariffs. “They’re coming here in huge size because they want to be in the greatest market in the world, and they want to avoid the tariffs,” he said.
Despite this, TSMC has benefited from significant US government incentives, including a $5bn low-cost loan. The company’s new investments will still require approval from Taiwan’s government, which has been cautious about advanced chip technology being manufactured overseas.
TSMC’s expansion follows a wave of major technology investments in the US. Apple recently announced a $500bn plan to expand its American operations, while Oracle, OpenAI, and SoftBank have pledged $500bn to build AI infrastructure.
