Taiwan Semiconductor Manufacturing Company (TSMC) plans to invest $100 billion in the US to fund five new fabrication plants in Arizona, amid pressure from the Trump administration for chipmakers like TSMC to move production to the country. The deal is seen as a way to boost economic security and reduce tariffs.
However, experts warn that implementing such tariffs would be challenging due to the complex global semiconductor supply chain. Tariffs could lead to significant disruptions in the industry, affecting not only chipmakers but also their clients who rely on TSMC products.
TSMC stands to lose less from potential US tariffs than other companies, as it dominates the market with 90% of advanced chip production. However, smaller Taiwanese companies that design and assemble chips are more vulnerable to tariffs and may struggle to pass down costs to their clients.
The $100 billion investment is not entirely unexpected, given TSMC’s existing presence in Arizona. The company has already opened one factory there and is exploring partnerships with other US firms, including Intel. However, these deals come with challenges, such as protecting trade secrets and maintaining relationships with established partners.
As the Trump administration continues to pressure chipmakers, TSMC will need to navigate the chaos while preserving its interests. The deal marks a significant shift in TSMC’s strategy, which aims to maintain control over its market share while reducing dependence on US government support.
Source: https://www.wired.com/story/tsmc-tariffs-trump-impacts