U.S. President Donald Trump stated that TSMC would be hit with tariffs as high as 100% if it failed to construct production sites in the U.S., reports Reuters. The company now plans to spend $200 billion on its U.S. manufacturing site, according to President Trump. He also denounced a $6.6 billion financial package provided to TSMC to build fabs in Arizona under the CHIPS Act enacted by the former President Joe Biden, arguing it was unnecessary.
"TSMC, I gave them no money, great company, most powerful in the world, biggest chip company in the world," Trump said at the event. "They are spending $200 billion in Arizona building one of the biggest plants in the world. All that without money. All I did is say '...if you don't build your plant here you are going to pay a big tax 25% maybe 50% maybe 75% maybe 100%.'"
Trump says that when he threated Taiwanese chipmakers with massive import duties on their products in the U.S., TSMC agreed to increase its investments in its American operations from $65 billion till 2030 to $165 billion over an unspecified amount of time. TSMC's original plan included four chip production modules at its Fab 21 site near Phoenix, Arizona. The new plan is to build semiconductor chip production modules, two advanced packaging facilities, and an R&D center in the U.S.
This time around Trump mentioned "$200 billion in Arizona," which is higher than $165 billion that TSMC committed to spend in March.
Considering that now Trump mentions $200 billion and up to 100% import tariffs, this might be seen by TSMC and other semiconductor companies as another threat from the U.S. administration. This comment is made as the industry braces itself for Trump's 'chip tariffs' that are starting 'very soon'. the same industry that is trying to digest the 20% tariff on lithography equipment crucial for chip production that U.S. chipmakers (including but not limited to Intel and TSMC) will have to pay from now on. Perhaps, now the most important fab tools got 20% more expensive for producers of semiconductor, Trump mentions $200 billion instead of $165 billion.
Speaking at an event held by House Republicans, Donald Trump said that companies in the semiconductor industry are financially capable and should not get support from the U.S. taxpayers to build fabs in America, thus again criticizing the CHIPS and Science Act imposed by the former administration to motivate chipmakers to build production sites in the USA. The CHIPS Act has attracted over $450 billion in planned private investments in the U.S. from companies like Intel, GlobalFoundries, Micron, Samsung, SK hynix, Texas Instruments, TSMC, as well as their peers from the supply chain, according to SIA.
