Trump says TSMC may double US investment to $300b

US President Donald Trump said that Taiwan Semiconductor Manufacturing Company (TSMC) could invest US$300 billion in Arizona, a figure that is nearly double TSMC’s current announced US investment plans.

TSMC, a chipmaker based in Hsinchu, Taiwan, has not commented on Trump’s statement and said any updates would come through official channels.

Trump also mentioned that the US plans to announce new tariffs on semiconductors within the next week, aiming to boost domestic production.

TSMC previously announced it would increase its US investment to US$165 billion for new fabs and facilities in Arizona.

The company warned in May that new US tariffs could impact its investment plans.

🔗 Source: Focus Taiwan

🧠 Food for thought

1️⃣ Tariff differentials create investment pressure beyond normal business logic

The $300 billion figure Trump mentioned reflects how tariff policy can drive investment decisions that exceed typical business planning.

Taiwan currently faces 20% U.S. tariffs compared to 15% for Japan and South Korea, creating a competitive disadvantage that requires offsetting through larger domestic investments1.

This tariff was actually reduced from an initially proposed 32%, showing how negotiation dynamics work in practice2.

Taiwan’s $73.9 billion trade surplus with the U.S. in 2024 provides context for why policymakers view such large investment commitments as necessary to rebalance economic relationships1.

The pattern demonstrates how countries use investment pledges as diplomatic tools to secure better trade terms, often resulting in commitments that are larger than what companies might choose based purely on market conditions.

2️⃣ Semiconductor tariffs face unique implementation challenges due to industry structure

The semiconductor industry presents particularly complex tariff dynamics because the U.S. currently produces only about 10% of global chips despite hosting many major semiconductor companies3.

Research shows that a 25% semiconductor tariff could decrease U.S. GDP by 0.18% in the first year and create cumulative losses of $1.4 trillion over ten years due to supply chain disruptions4.