TSMC Pledges $100 Billion Investment in the US
How do you like them semiconductors?
Taiwan Semiconductor Manufacturing Company (TSMC) is committing $100 billion to expand its Arizona operations, a move that will significantly bolster U.S. chipmaking capacity.
The investment will fund three new fabrication plants, a research and development center, and two advanced packaging facilities. This expansion builds on the $65 billion already allocated under Biden’s CHIPS and Science Act and could help TSMC sidestep the 25% tariffs Trump has threatened on Taiwan’s semiconductor industry.
Tariffs and other forms of economic coercion are the modus operandi of Mr. Trump, and TSMC is not the only company to buckle under the President. To avoid import taxes, Honda is shifting its manufacturing to the US and away from Mexico. Continued victories could embolden his strategy.
TSMC remains the undisputed leader in global semiconductor manufacturing, producing 90% of the world’s most advanced chips. Apple and NVIDIA depend on its 3-nanometer technology, and as the industry moves toward 2nm and 1.6nm chips, the geopolitical stakes are rising.
These next-generation semiconductors will power artificial intelligence, military systems, and high-performance computing, making domestic production a national priority for Washington.
Taiwanese officials have made it clear that their most advanced chip manufacturing will not be relocated. Over decades, the island has developed a highly specialized workforce, university-industry partnerships, and a tightly integrated supply chain that cannot be easily replicated elsewhere.
Semiconductors serve as a crucial form of leverage for Taipei, ensuring that the global economy—particularly the United States—remains invested in Taiwan’s security.
Shifting too much production to the U.S. could dilute that leverage, reducing Taiwan’s strategic weight in Washington and weakening its deterrence against Beijing. The historical parallel to Ukraine’s 1994 decision to relinquish its nuclear arsenal has not gone unnoticed.
Taiwan’s value to the United States extends far beyond semiconductors. The Taiwan Strait is one of the most critical maritime chokepoints in global trade, with 88% of the world’s largest ships by tonnage passing through its waters.
The island also serves as a forward defense position for U.S. military forces, shielding bases in Guam and Hawaii while acting as a buffer for allies like Japan and the Philippines.
Taipei is reinforcing its military relationship with Washington, negotiating new arms deals that include HIMARS rocket systems and coastal defense missiles. As tensions with China escalate, Taiwan’s role in the U.S. security architecture will only become more central.
Additional arms will be necessary, for a silicon shield can only deter so much.