Companies all around the world, not just in the US, are scrambling to find a way to mitigate the tariffs imposed by the Trump administration. The solution seems “simple”: relocate or open more facilities in the US. TSMC is one of the biggest names in the semiconductor market, and according to Trump, it is planning a $300 billion investment in the US.
Trump: TSMC will make $300 billion investment in US
Speaking during an interview on CNBC’s “Squawk Box,” Trump was quoted as saying, “We have the biggest in the world […] from Taiwan is coming over and spending 300 billion dollars in Arizona building the biggest plant in the world for chips and semiconductors.” Note that TSMC has not officially announced anything themselves. The company also declined to respond when asked about Trump’s remarks.
However, if what Trump said about a $300 billion TSMC investment in the US is true, it is triple what the company had initially planned. Earlier this year, Trump announced that TSMC was planning to drop $100 billion in the US. We’re not sure if this $300 billion investment is in addition to or if the company simply increased its total commitment.
But according to analyst Ming-Chi Kuo, he believes it’s one of Trump’s favored tactics. Start with a high number and then negotiate it down. It is also believed that TSMC’s investment could play a role in reducing tariffs from Taiwan. Compared to Japan and South Korea, which face 15% tariffs, Taiwan is looking at tariffs of 20%. Trump had also previously suggested TSMC could face tariffs of up to 100%.
It is speculated that Taiwan needs to make a substantial investment if it wants to lower those numbers. TSMC spending more to build up its presence in the US could do that.
We can still expect price hikes
That being said, even if TSMC were to spend that much money building up its facilities in Arizona, we wouldn’t be surprised if we still saw price hikes in our phones, tablets, and laptops. This is because it would take TSMC time to scale up its operations. TSMC is the semiconductor manufacturer for companies like Apple and Qualcomm.
Both these companies order millions of chips from TSMC every year. It is unlikely that TSMC’s US factories can keep up with the demand, at least in the near future. This means that Apple and Qualcomm will still need to rely on TSMC’s other facilities. This, in turn, will incur tariffs.
According to AMD CEO Lisa Su, TSMC’s US-manufactured chips could cost around 20% more.
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