TSMC considers U.S. investment amid Trump's tariffs on Taiwan's chip industry

In early 2022, escalating tensions between Taiwan's semiconductor industry and the U.S. government emerged, highlighted by President Donald Trump's tariff threats against Taiwanese chipmakers. This situation posed significant challenges for Taiwan Semiconductor Manufacturing Company (TSMC), a key player in the global chip market. In particular, the U.S. accounted for less than 1 percent of global fabrication capacity in advanced logic chip manufacturing that year. Projections indicated that this figure would grow to 28 percent by 2032, as foreign companies like TSMC began ramping up production in the U.S., specifically in Arizona and Texas, where advanced chip production is planned. TSMC is actively seeking to maintain a strong relationship with the Trump administration to protect its interests, but strained ties could lead to increased regulatory scrutiny and accusations from Trump and his associates. The Taiwanese government, led by President Lai Ching-te, has historically supported TSMC given its critical role in Taiwan’s foreign and security policy. Although TSMC has received $1.5 billion from the CHIPS Act funding during the Biden administration, the company is keen on increasing its investment to solidify its operations in the U.S. as negotiations with the White House unfold. Various reports suggest a potential collaboration with Intel Foundry Services, raising concerns about direct competition and technology leakage due to TSMC's current technologies accounting for a large portion of their revenue. TSMC’s advanced 3 nm, 5 nm, and 7 nm chips generate approximately 70 percent of their revenue, suggesting that any joint venture could create conflicts of interest. Additionally, plans for TSMC to possibly construct a new advanced packaging plant in Arizona are in the early stages of consideration. By exploring these opportunities, TSMC aims to expand its investment in the U.S. and boost local chipmaking capabilities while addressing the complexities involved in collaborating with a competing foundry. Although there were discussions about technology transfers, both TSMC and the Taiwanese government remain opposed to sharing critical technologies. Instead, they prefer further investment commitments and collaboration with local players, indicating the importance of TSMC's role in the global semiconductor ecosystem and the geopolitics surrounding technology manufacturing.