TSMC Expands US Footprint With $100B Investment, But Shares Slip on Cost Concerns

• Taiwan Semiconductor Manufacturing Company has announced a further $100 billion investment to build five new U.S. chip factories.
• Shares in the world’s largest chipmaker slipped following the announcement as the Taiwan stock exchange reeled from the news of U.S. tariffs.
• This comes as President Trump said the 25% import tariffs against Canada and Mexico will go ahead.

Shares in TSMC have slipped following the announcement of the firm’s $100 billion investment into the U.S. to build five new chip plants.

The investment follows years of concern from the U.S. over TSMC’s dominance over the semiconductor market.

The 2022 CHIPS Act, introduced by President Biden, was designed to reduce the country’s reliance on advanced chips produced in China and elsewhere, incentivizing more manufacturing on domestic soil.

TSMC U.S. Investment

President Donald Trump announced the investment during a press conference on Monday, March 4, alongside TSMC chairman and CEO C.C. Wei.

“We are going to produce many AI chips… to support AI progress,” Wei said in the White House briefing.

TSMC, the world’s largest contract chipmaker, specializes in advanced chip packaging techniques essential for producing high-performance semiconductors that power AI technologies.

The Taiwan-based firm produces chips for the world’s largest companies, including Apple, Qualcomm, AMD, Nvidia, and Intel.

TSMC previously pledged to pour $65 billion into new U.S. plants, bringing its total investment in the U.S. chip industry to $165 billion.

“We’re pleased to have an opportunity to meet with the President and look forward to discussing our shared vision for innovation and growth in the semiconductor industry, as well as exploring ways to bolster the technology sector along with our customers,” TSMC said in a statement.

TSMC Shares Slip

Despite the investment announcement, TSMC saw its shares decrease following Trump’s remarks that he would continue with his 25 percent import tariffs from Canada and Mexico.

The tariffs are set to come into effect March 4.

Shares in TSMC fell 1.9% in Taipei on Monday, March 3, after its American depositary receipts declined more than 7%.

The losses contributed to a 1.85% decline in the electronics index and a 160-point fall in the Taiwan Stock Exchange.

The Taiwan Stock Exchange’s benchmark weighted index ended down 1.29% on Monday.

“Today’s losses largely reflected U.S. volatility caused by Trump’s confirmation of the tariff plan,” Concord Securities analyst Kerry Huang told Investing.com .

Donald Trump’s Tough Policies

During the TSMC investment announcement, Trump stressed the importance of the U.S. dominating the chip market.

“Semiconductors are the backbone of the 21st-century economy, and really, without the semiconductors, there is no economy powering everything from AI to automobiles to advanced manufacturing,” Trump said during a White House meeting with TSMC CEO C.C. Wei.

“It’s a matter of economic security. It’s also a matter of national security for us,” he added.

In February, Trump said the U.S. had to start making chips domestically as practically “everything is made in Taiwan.”

“… a little bit in South Korea, but everything—almost all of it is made in Taiwan. And we want it to be made—we want those companies to come to our country, in all due respect,” Trump said.

Howard Lutnick, U.S. Commerce Secretary, said TSMC’s new chip plant investment was proof that Trump’s tough policies were having a positive impact on America.

“Now you’re seeing the power of Donald Trump’s presidency, because TSMC, the greatest manufacturer of chips in the world, is coming to America with $100 billion investment,” Lutnick said.

“And of course, that is backed by the fact that they can come here, because they can avoid paying tariffs,” he added.