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In his 90-minute address to Congress, President Donald Trump celebrated TSMC’s pledge to invest $100 billion in the U.S. as proof that his “America First” investment plan was working.
The chipmaker’s investment pledge came after Trump threatened to place tariffs on chips from Taiwan, which the president regularly accuses of stealing the U.S.’s chip business. And in his congressional address, Trump credited his tariff threat—and not subsidies put into place by previous President Joe Biden—for TSMC’s decision to invest more in the U.S.
But in recent days, Taiwan's government and TSMC have come out to say that the chipmaker's decision was not due to Washington pressure—and many claim it was nothing more than a move to expand manufacturing of the day-to-day chips used by its biggest customer.
Taiwan’s economics minister Kuo Jyh-Huei argued last week that TSMC’s U.S. investment plans “have nothing to do with tariffs.”
“TSMC’s global expansion is a crucial development,” he said.
TSMC’s latest U.S. investment would add two advanced packaging facilities, three more semiconductor foundries, and a research center to the chipmaker’s Arizona facility. The new commitment brings TSMC’s total investment in the U.S. state to $165 billion.
“Customer demand” drove TSMC’s decision to invest in the U.S., said TSMC CEO C.C. Wei last week. “The amount of investment in the U.S. may seem large, but it is still not enough to meet demand,” Wei added.
Silicon shield
Taiwan’s chip industry has been credited as a “silicon shield”, helping to protect the self-governing island from Beijing pressure. Until now, the self-governing island has been the only source of the advanced semiconductors used by firms like Apple and Nvidia.
But in recent years, TSMC, the world’s leading contract chipmaker, has diversified its supply chain with new plants in the U.S., Japan, and Germany. Washington in particular has publicly dangled billions in subsidies to encourage chip manufacturers to base operations in the country.
Now, with TSMC’s $100 billion investment pledge, Taiwan’s opposition party, the Kuomintang, has questioned the government's plans, raising worries that more operations opening in the U.S. would negatively affect Taiwan’s ‘silicon shield’
The island’s third political party, the Taiwan People’s Party, also questioned whether TSMC would move its most advanced technologies to the U.S. in the near term, something that the island’s economics minister said would not happen.
Even Beijing has gotten in on the act, with Chinese officials commenting in February that people in Taiwan were worried TSMC might become the “United States Semiconductor Manufacturing Company”. (Beijing’s spokesperson didn’t provide evidence at the time.)