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On Monday, the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Company Limited TSM, has announced that it is making an investment of more than $100 billion in the United States to build at least five more chip facilities in the country. TSMC said that this expansion includes three chip fabrication plants, two advanced packaging facilities and a research and development center.
President Trump announced the deal at a White House event. “Semiconductors are the backbone of the 21st century economy,” the President said. “And really, without the semiconductors, there is no economy. Powering everything from AI to automobiles to advanced manufacturing, we must be able to build the chips and semiconductors that we need right here in American factories with Americans’ skill and American labor.”
CC Wei, the CEO of TSMC, joined the President in announcing the investment at the White House alongside the U.S. commerce secretary, Howard Lutnick, and David Sacks, a Trump adviser on AI and crypto. This will now bring TSMC’s total investment in chip manufacturing in the United States to $165 billion. President Trump called Wei a “legend” and said the investment will create thousands of jobs while boosting national security and bringing chip manufacturing to the country. The Trump administration has been on this fast course of ushering in investment in the United States since the 47th President’s inauguration.
The deal is also geopolitically significant because more such deals might help Taiwan be what the Trump administration considers proper allies and thus help them secure security guarantees in the event of a Chinese military move. On the topic, when asked whether the new investment would reduce the potential impact on the U.S. economy if China were to get a hold of Taiwan, Trump acknowledged the significance of the move and made clear the event would still be “catastrophic.”
TSMC is a Zacks Rank #2 (Buy) stock with a VGM score of B. NVIDIA Corporation NVDA and Intel Corporation INTC are peers that will be keeping a close watch on these developments. Intel currently carries a Zacks Rank #3 (Hold), while Nvidia is ranked #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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