Yahoo Finance

(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. has begun construction on a third chip plant in Arizona, ramping up its US expansion as the Trump administration threatens further tariffs to spur American manufacturing.

Most Read from Bloomberg

• New York City Transit System Chips Away at Subway Fare Evasion

• NYC’s Congestion Toll Raised $159 Million in the First Quarter

• The Last Thing US Transit Agencies Should Do Now

• At Bryn Mawr, a Monumental Plaza Traces the Steps of Black History

• At the National Public Housing Museum, an Embattled Idea Finds a Home

The world’s most advanced chipmaker announced the third phase of its US expansion the same day Commerce Secretary Howard Lutnick toured TSMC’s site, which the company called the single largest foreign investment in US history.

TSMC, the main chipmaker to Apple Inc. and Nvidia Corp., is the centerpiece of the US government’s effort to entice manufacturing back home. Lutnick has signaled he could withhold promised Chips Act grants as he pushes companies in line for federal semiconductor subsidies to substantially expand their US projects, Bloomberg News has reported.

In March, TSMC Chief Executive Officer C.C. Wei joined Trump at the White House to unveil plans to invest an additional $100 billion in US plants that will boost its output on American soil. The spending adds to $65 billion in planned TSMC investments in the US and would eventually bring its American presence to a half-dozen plants for advanced wafer fabrication and a couple more for advanced packaging.

Lutnick told CNBC in an interview on Tuesday the Trump administration was able to get the additional $100 billion investment without any promise of subsidies. “You know what the Trump administration paid for that? Zero. It’s tariffs that brought that in. So 40,000 of construction employees, and then 20,000 full-time employees, here for the far-distant future as we bring semiconductors here. This is the point of the Trump tariff model,” he said.

TSMC’s CEO said on an earnings call in April that the construction of the second plant in Arizona was already completed and the company was working on speeding up the production schedule. The company previously said that the first factory entered high-volume production in the fourth quarter of last year with yields comparable to Taiwan factories.

Wei added that the third and fourth plants will use its most advanced N2 and A16 process technologies and the fifth and sixth plants will use even more advanced technologies.

(Updates with Lutnick quotes, background on TSMC plans from fifth paragraph.)