Trump Asserts He Coerced TSMC into Over $100 Billion Investment with “Tariff Threat” of Up to 100%

During the Trump administration, TSMC’s investment choices in the United States were largely reactive, driven by a desire to avert significant tariffs rather than stemming from strategic planning.

TSMC’s Investment: A Response to Tariff Pressures

As the leading semiconductor manufacturer globally, TSMC faces mounting challenges amidst ongoing geopolitical tensions and the evolving chip market. Despite holding a dominant position in the industry, TSMC found itself under pressure from the Trump administration, which threatened the company with punitive tariffs of up to 100% unless they committed to investing in U. S.facilities. President Trump publicly highlighted this stance during a National Republican Congressional Committee dinner, asserting the administration’s firm position on domestic investments.

TSMC, I gave them no money; great company, the most powerful in the world. Biggest chip company in the world. They’re spending $200 billion in Arizona building one of the biggest plants in the world. And that’s without money. All I did was say, if you don’t build your plant here, you’re going to pay a big tax, 25, maybe 50, maybe 75, maybe 100 percent.

– Trump

In response to this pressure, TSMC committed to a substantial $100 billion investment, which will pave the way for the establishment of four new facilities in Arizona, alongside a cutting-edge packaging and research and development center. Publicly, this move was characterized as a strategic initiative aimed at diversifying the supply chain and strengthening ties to the U. S.market. However, emerging insights suggest that TSMC’s motivations were less about genuine enthusiasm and more about compliance with the U. S.government’s demands, as there are allegations that they faced accusations of technology theft from U. S.firms.

TSMC getting N3E orders from various clients

While TSMC’s expansion into the United States may offer certain advantages, it introduces complex challenges to the semiconductor supply chain. Chief among these challenges is the intricate process required to advance cutting-edge technology to U. S.facilities. TSMC aims to ramp up production to a 1.6nm process node by the end of this decade, indicating ambitious goals for the U. S.semiconductor landscape. However, the origins of this investment are tinged with the notion of coercion rather than strategic foresight.

Trump’s overarching vision for reshaping the U. S.supply chain aligns with some economically sound principles, yet his methods have been described by critics as “drastic”and harmful to business interests. Despite TSMC’s cooperation, recent tariff measures imposed on Taiwan indicate that the U. S.government remains unpredictable, complicating relations further—although chip imports are currently exempt from these tariffs.

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