US President Trump, TSMC Announce $100 Billion Plan to Build 5 New US Factories

Taiwanese semiconductor company TSMC plans to make a fresh $100 billion (roughly Rs. 8,73,656 crore) investment in the US that would involve building five additional chip facilities in the country in coming years, its CEO announced with President Donald Trump on Monday.

Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker and a leading supplier to major US hardware manufacturers, announced the plan as its CEO CC 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 chip fabrication plants, two advanced packaging facilities and a major research and development center.

The $100 billion (roughly Rs. 8,73,656 crore) 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 US investment by $25 billion (roughly Rs. 2,18,414 crore) to $65 billion (roughly Rs. 5,67,869 crore) and add a third Arizona factory by 2030.

TSMC did not give a timeframe 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, with the company eventually starting chip production in 2024 at a higher cost than at its facilities in Taiwan. 

The company's Taiwan-listed shares opened down 2.25 percent on Tuesday and were trading about 1.5 percent lower at 0413 GMT.

"Higher costs are definitely a concern for TSMC," said Andrew Tsai, chairman of Taiwan's Capital Investment Management Corp, an investment consulting firm.

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

The Taiwanese company could also play a central role in saving rival Intel. 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 (roughly Rs. 43,68,405 crore) 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 US. 

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."

Taiwan's cabinet said on Tuesday that it would review the investment in accordance with its laws, which require government approval for any large overseas investment by a Taiwanese company.

Taiwan Premier Cho Jung-tai said the government generally viewed overseas investments that would raise Taiwan's overall competitiveness positively and that Taiwan was a "most important" partner to the US in high-tech sectors.

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 (roughly Rs. 4,60,434 crore) in subsidies for American semiconductor production and research.

Last year, the US Commerce Department finalized a $6.6 billion (roughly Rs. 57,667 crore) government subsidy for TSMC to produce semiconductors in Phoenix, Arizona, while the $100 billion  (roughly Rs. 8,73,656 crore)  announced on Monday would be eligible for a 25 percent manufacturing investment tax credit under the 2022 law.

Under Biden, the Commerce Department convinced all five leading-edge global semiconductor firms to locate factories in the US 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 were investing in the US as they sought 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 to 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 (roughly Rs. 13,107 crore) 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 US customers in Arizona.

© Thomson Reuters 2025

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