Trump & TSMC: $100B Chip Plan
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TSMC—the world’s largest contract chipmaker—has announced a staggering $100 billion investment to build five new factories in the United States.
This announcement, made by TSMC CEO C.C. Wei during a meeting with former President Donald Trump at the White House, signals not only a major commitment to boosting domestic chip production but also an effort to reduce American reliance on Asian-manufactured semiconductors.
The ambitious plan includes the construction of three new chip fabrication plants, two advanced packaging facilities, and a major research and development center.
These facilities will play a crucial role in meeting the surging demand for high-end chips used in everything from smartphones and electric vehicles to fighter jets and AI-driven applications. As Trump emphatically put it, “We must be able to build the chips and semiconductors that we need right here. It’s a matter of national security for us.”
This new $100 billion outlay builds on a previous announcement from last April, when TSMC expanded its planned US investment from $65 billion to include a third Arizona factory by 2030.
According to a TSMC spokesperson, the new investment is poised to create approximately 40,000 construction jobs over the next four years. Notably, the project even includes its own natural-gas power plant—a strategic inclusion, given current challenges in the U.S. electricity grid's capacity to support massive new data centers.
TSMC’s expansion is a linchpin in efforts to secure the US chip supply chain, which has come under increasing scrutiny amid concerns over Taiwan’s dominant role in the semiconductor market. With China exerting pressure on Taiwan and escalating its own ambitions under the “Made in China 2025” initiative, boosting domestic chip production in the US has become a top priority.
In fact, Commerce Secretary Howard Lutnick has emphasized that these investments are critical to avoiding the pitfalls of new tariffs and export controls that have rattled the industry in recent years.
For context, the first Trump administration famously lured TSMC to Arizona in 2019, setting in motion the CHIPS and Science Act passed under President Joe Biden in 2022.
This act provides $52.7 billion in subsidies for American semiconductor production and research. TSMC has already received $1.5 billion in CHIPS Act funds, and its latest announcement makes it eligible for a 25% manufacturing investment tax credit under the same law.
Such government backing not only reinforces TSMC’s strategic position but also underscores the bipartisan consensus that advanced semiconductor production is a cornerstone of national security.
Beyond TSMC, the ripple effects of this investment are being felt across the tech industry. Major U.S. companies like Nvidia, Qualcomm, and Advanced Micro Devices rely on TSMC’s state-of-the-art chip production capabilities.
In fact, as reported by Reuters, TSMC recently began producing advanced 4-nanometer chips for US customers in Arizona and is on track to start production of its 2-nanometer technology by 2028 at its second Arizona facility. These advances are vital for powering the next generation of AI, 5G, and high-performance computing applications.
On the flip side, the announcement has also provided a much-needed boost to American manufacturing confidence. President Trump lauded the plan as a fulfillment of his campaign pledge to bolster domestic industries and create American jobs.
For tech investors and industry insiders, TSMC’s commitment is seen as a strong signal that the semiconductor supply chain is on the cusp of a major renaissance—a digital gold rush fueled by massive investments in infrastructure.
Picture TSMC’s new US factories as modern-day chip foundries where instead of mining for gold, engineers are “digging” for silicon. And while some might worry about the geopolitical tensions surrounding Taiwan and China, one can’t help but smile at the thought of an assembly line that churns out chips so advanced they practically think for themselves.
In my many years watching the tech industry evolve, it’s clear that we’re witnessing a transformative era. With TSMC’s enormous investment paving the way for a robust domestic semiconductor ecosystem, and with initiatives like the CHIPS Act reinforcing the US’s commitment to high-tech manufacturing, the stage is set for a new chapter in global tech dominance.
Whether you’re a die-hard tech enthusiast or just someone who marvels at the innovation around you, it’s an exciting time to watch these semiconductor titans build the future—one chip at a time.
I welcome manufacturing in the US, obviously, but I would caution about reading too much into this. Very often, these grand pronouncements do not pan out or are drastically scaled back.
Recall the Foxconn plant to be built in Wisconsin announced in Trump’s first term? It was scaled back to 1/10th its size. Under Biden, Intel announced a grand plan to invest $100B in chip manufacturing in Ohio but….
It’s now delayed till 2031, which means it's not getting build at all. Also, recall that these facilities need a lot of steel, aluminum, fuel oil, copper, machine tools…etc. All things that Trump is throwing new taxes on.
At best, this means that these dollars don’t reach as far and few jobs are created. At worst, tariffs will keep them from being built at all. We cannot tariff our way to prosperity.