Trump Targets CHIPS Act as TSMC Unveils $100B Investment Amid Tariff Fears

On Monday, TSMC announced an ambitious $100 billion expansion plan, prompting President Donald Trump to claim he attracted the semiconductor giant to the U.S. not through direct subsidies but by threatening tariffs on imported chips.

TSMC is currently establishing a $65 billion complex in Phoenix, featuring three fabrication facilities. The latest investment will see the addition of three more fabs to this site.

“Taiwan Semiconductor… announced a $165 billion investment to build the most powerful chips on earth, right here in the USA,” Trump stated during his address to Congress. He emphasized that no financial incentives were provided to TSMC.

This investment is part of a broader federal initiative outlined in the 2022 CHIPS and Science Act, which promised $6.6 billion to support TSMC’s expansion in Phoenix. Trump criticized the CHIPS Act, calling it “a horrible, horrible thing,” and urged Congress to repeal it.

President Joe Biden ensured the funding was secured before leaving office, with TSMC’s CFO, Wendell Huang, confirming receipt of $1.5 billion in government support just before Trump’s inauguration.

In April, TSMC revised its investment plans from $40 billion to $65 billion following Biden’s announcement of the subsidy. As the world’s largest chipmaker, TSMC produces semiconductors for major companies such as Apple, Nvidia, and Qualcomm, supplying technology for smartphones, self-driving cars, and artificial intelligence.

The initial fab in Phoenix has already commenced operations, while the second is under construction. The company anticipates that the third fab will be operational by 2030. Trump’s $165 billion figure mentioned in Congress includes funds from the $65 billion investment committed before he took office.

During a joint appearance at the White House, Trump and TSMC CEO C.C. Wei revealed plans for three additional fabs, two advanced packaging facilities, and a major R&D center. The TSMC project stands as the largest foreign investment in Arizona’s history.

Trump remarked, “It’s going to mostly be in Arizona, from what I understand. Which is a great state. I like it because I won it.” He reiterated his desire for Congress to abolish the CHIPS Act, insisting that companies would come to the U.S. to avoid tariffs.

The $280 billion CHIPS package allocates $53 billion for domestic chip research and production. Trump suggested the threat of tariffs motivated TSMC’s expansion, emphasizing that foreign firms would be discouraged from paying hefty taxes.

In response, Senator Mark Kelly, D-Arizona, who played a role in shaping the CHIPS Act, criticized Trump’s call to dismantle the legislation, asserting that it was pivotal in attracting TSMC to Arizona. Senator Ruben Gallego, D-Arizona, claimed Trump’s actions were motivated by political grievances against Biden.

Meanwhile, TSMC’s expansion has raised concerns in Taiwan, where its position as a key chip supplier is seen as vital for security against China. Taiwan President Lai Ching-te reassured journalists that the expansion fosters international cooperation, enhancing Taiwan’s strength.