Chip maker TSMC announces new US$100 billion plan to build five new US factories

WASHINGTON: Taiwanese semiconductor company TSMC announced on Monday (Mar 3) plans to make an additional US$100 billion investment in the United States and build five additional chips factories in the coming years.

Taiwan Semiconductor Manufacturing Co's CEO C C Wei announced the plan in a meeting at the White House with President Donald Trump. "We must be able to build the chips and semiconductors that we need right here," Trump said. "It's a matter of national security for us."

TSMC, the world's largest contract chipmaker, is a leading supplier to major US hardware manufacturers.

The US$100 billion outlay, which would boost domestic production and make the United States less reliant on semiconductors made in Asia, is in addition to a major prior investment announcement. TSMC agreed in April to expand its planned US investment by US$25 billion to US$65 billion and to add a third Arizona factory by 2030.

With his Nov 5 election victory largely driven by voters' economic concerns, Trump has stepped up efforts to bolster investments in domestic industries to create jobs.

US INVESTMENT BOOM

The TSMC announcement is the latest in a string of such developments. In February, Apple said it would invest US$500 billion in the next four years. Emirati billionaire Hussain Sajwani and SoftBank also have promised multi-billion dollar investments in the US.

TSMC said on Monday it looks "forward to discussing our shared vision for innovation and growth in the semiconductor industry, as well as exploring ways to bolster the technology sector along with our customers".

The US Commerce Department under then President Joe Biden finalised a US$6.6 billion government subsidy in November for TSMC's US unit for semiconductor production in Phoenix, Arizona.

Biden signed the CHIPS and Science Act legislation in 2022 to provide US$52.7 billion in subsidies for American semiconductor production and research. 

TAIWAN CHIP'S DOMINANCE

Taiwan's dominant position as a maker of chips used in technology from cellphones and cars to fighter jets has sparked concerns of over-reliance on the island, especially as China ramps up pressure to assert its sovereignty claims.

China claims Taiwan as its territory, but the democratically elected government in Taipei rejects Beijing's sovereignty claims.

Under Biden, the Commerce Department convinced all five leading-edge semiconductor firms to locate factories in the US as part of the program to address national security risks from imported chips.

Trump's Commerce Secretary Howard Lutnick told lawmakers last month that the program was "an excellent down payment" to rebuild the sector, but he has declined to commit grants that have already been approved by the department, saying he wanted to "read them and analyze them and understand them."

A TSMC spokesperson said last month the company had received US$1.5 billion in CHIPS Act money before the new administration came in as per the milestone terms of its agreement.

TSMC last year agreed to produce the world's most advanced 2-nanometer technology at its second Arizona factory, expected to begin production in 2028. TSMC also agreed to use its most advanced chip manufacturing technology called "A16" in Arizona.

TSMC has already begun producing advanced four-nanometer chips for US customers in Arizona.

The TSMC award included up to US$5 billion in low-cost government loans.