Taiwan Semiconductor Manufacturing Company (TSMC) invests $165 billion to speed up the construction of its wafer plant in Arizona, United States, to address potential US semiconductor tariffs.

Taiwan • Business • 04/13 19:07
Taiwan Semiconductor Manufacturing Company (TSMC) invests $165 billion to speed up the construction of its wafer plant in Arizona, United States, to address potential US semiconductor tariffs.

TSMC is accelerating the construction of its third-phase semiconductor fabrication plant in Arizona in response to the potential imposition of tariffs on semiconductor products by the United States, increasing the total investment to $165 billion and advancing the groundbreaking to June 2025. U.S. Secretary of Commerce Lutnik stated that individual tariffs on semiconductor products are expected to be imposed within one to two months to encourage manufacturing to return to the U.S., prompting heightened alert and responsive measures within the industry.

Key Updates

04/14 04:20

The United States has imposed a 46% tariff on Vietnamese goods, creating pressure on Taiwanese businesses to find ways to overcome.

On April 2, 2025, President Trump of the United States announced the imposition of "reciprocal tariffs" on multiple countries, including Vietnam, levying a 46% import tax on goods from Vietnam, which sent shockwaves through Taiwanese businesses in Vietnam. The U.S. later announced a 90-day suspension and began trade negotiations, but the uncertainty surrounding the policy has already exerted pressure on Taiwanese businesses. Taiwanese businesses in Vietnam are responding by diversifying their markets and optimizing production processes to stay competitive.

04/14 01:07

The Trump Administration intends to terminate duty exemptions for tech products and initiate a national security probe pursuant to Section 232.

On April 14, 2025, President Trump of the United States announced the imposition of specific tariffs on 20 technology products, including smartphones, laptops, and semiconductor chips, even though these products were recently added to a temporary tariff exemption list. U.S. Commerce Secretary Lutnick and White House economic advisor Hassett confirmed that these products will be designated as critical to national security and may face new tariffs within one to two months. The Trump administration plans to conduct a national security trade investigation under Section 232 of the Trade Expansion Act to ensure the independence and security of the U.S. technology supply chain.

04/13 23:07

US-China Tariff War Intensifies: Trump's Policy Drives Up US Bond Yields, Taiwan's Semiconductor Industry Benefits from Rush Order Effect

President Trump of the United States announced a 145% tariff on Chinese goods and imposed a 10% reciprocal tariff on several countries, leading to an escalation in the U.S.-China trade war and causing turbulence in global markets. The yield on the U.S. 10-year Treasury bond surged to 4.59%, reaching a new high for 2023. Despite uncertainties facing the tech industry, strong demand for AI is prompting American cloud service providers to speed up their orders, benefiting Taiwan's semiconductor supply chain with a wave of urgent orders. Companies such as TSMC are benefiting, and air freight space is fully booked.

04/13 22:39

Trump's Fluctuating Tariff Policy: Electronics Subject to Separate Tariffs, U.S. Postpones Tariffs on 75 Countries for 90 Days

In early April 2025, President Trump of the United States announced the implementation of "reciprocal tariffs" on multiple countries. Subsequently, on April 11, he released a list of 20 electronic products exempt from tariffs. However, Trump denied the existence of this policy, calling it "fake news," and planned to impose "semiconductor tariffs" on these products. Meanwhile, the U.S. temporarily postponed the imposition of reciprocal tariffs on 75 countries for 90 days. This policy repeatedly triggered market fluctuations, and experts warned that investment risks in Taiwan's stock market have increased.

04/13 22:06

In 2025, the US-China trade war heats up: Trump's tariff policy impacts the global tech supply chain, TSMC sees a sudden surge in urgent orders, and France proposes European Union border quotas.

In April 2025, the US-China trade war intensified as President Trump imposed tariffs as high as 145% on Chinese goods, and China retaliated by imposing a 125% tariff on American goods. The Trump administration temporarily exempted electronic products like smartphones from tariffs, but the semiconductor industry remained affected. TSMC received urgent orders from American clients, which accelerated the construction of its US plant. The French Finance Minister suggested that the EU set up border quotas to prevent a flood of cheap Chinese goods. After some fluctuations, the Taiwan stock market showed four major bullish signals, and market sentiment stabilized.

04/13 19:07

Taiwan Semiconductor Manufacturing Company (TSMC) invests $165 billion to speed up the construction of its wafer plant in Arizona, United States, to address potential US semiconductor tariffs.

TSMC is accelerating the construction of its third-phase semiconductor fabrication plant in Arizona in response to the potential imposition of tariffs on semiconductor products by the United States, increasing the total investment to $165 billion and advancing the groundbreaking to June 2025. U.S. Secretary of Commerce Lutnik stated that individual tariffs on semiconductor products are expected to be imposed within one to two months to encourage manufacturing to return to the U.S., prompting heightened alert and responsive measures within the industry.

04/13 18:39

Adjustment to Trump's Tariff Policy: Tech Products Temporarily Exempted, 30 Taiwanese Publicly Traded Companies Benefit

In early April 2025, President Trump of the United States announced the implementation of reciprocal tariff measures on 75 trade partners. The policy, originally set to take effect on April 9, was postponed for 90 days due to pressure, with the tariff rate reduced to 10%. On April 11, the U.S. Customs and Border Protection released a list of 20 technology products exempt from tariffs, including smartphones and computers, effective retroactively from April 5. U.S. Secretary of Commerce, Lutenik, stated on April 13 that these products would be included in the upcoming "semiconductor tariff policy." Thirty publicly traded companies in Taiwan may benefit from the exemption policy, but they should be cautious of potential policy changes.

04/13 18:08

The EU is accelerating negotiations for a free trade agreement to address US tariffs, and the ECB is expected to cut interest rates in April to ease economic pressure.

In response to U.S. President Trump's imposition of high tariffs on foreign trade partners, the European Union has postponed imposing retaliatory tariffs on the U.S. for 90 days to create room for negotiations and has sped up negotiations on free trade agreements with several countries to lessen dependence on the U.S. The European Central Bank plans to cut interest rates on April 17 to tackle slowing inflation and sluggish economic growth. This action is intended to lessen the impact of U.S. tariff policies on the European economy and to adjust the EU's trade and monetary policies accordingly.

04/13 17:06

The United States has temporarily exempted electronic products from tariffs, and the Secretary of Commerce has announced that tariffs on semiconductors will be imposed in one to two months.

On April 13, 2025, the U.S. government announced a temporary suspension of import tariffs on 20 categories of electronic products, including smartphones, laptops, and semiconductor components, offering short-term relief for companies like Apple, Dell, and TSMC. Howard Lutnick, the U.S. Secretary of Commerce, stated that this is a transitional measure, which is expected to be integrated into a new "semiconductor tariff" framework within one to two months, aimed at encouraging manufacturing to return to the U.S. and reducing dependence on Asian supply chains.

04/13 16:38

Trump's Tariff Policy for 2025 Increases Shoe Prices: Brands such as New Balance Face Pressure from Rising Import Costs

At the beginning of 2025, the Trump government implemented a new tariff policy, imposing tariffs as high as 125% on footwear products imported from countries like Vietnam and China, resulting in higher costs in the U.S. footwear market. Even though brands like New Balance stress "Made in USA," price hikes are unavoidable due to their reliance on imported materials. U.S. shoe manufacturing makes up just 1% of the market, and consumer spending is expected to go up, with shoe prices generally rising by 10% to 15%. This policy is intended to encourage the return of American manufacturing, but the supply chain's dependence on Asia makes it hard to avoid cost pressures.

TSMC's U.S. Expansion Plan Enters Acceleration Phase

Since TSMC announced in 2020 that it would establish its first wafer fab in Arizona, USA, it has increased its total investment in the area from the initial $12 billion to $16.5 billion, making it one of the largest foreign direct investments in U.S. history. According to supply chain sources, the third phase of the wafer fab (Fab 21p), originally scheduled to break ground in 2026, has been moved up to June 2025, with trial production expected in 2027, introducing advanced processes such as 2nm and A16.

Currently, the second phase of the wafer fab is undergoing cleanroom and electromechanical engineering construction, with trial production expected to begin by the end of 2026. After the third phase breaks ground, TSMC will immediately start building an advanced packaging plant, introducing technologies such as CoWoS and SoIC, further enhancing its manufacturing capabilities in the U.S. The supply chain indicates that TSMC has placed new equipment orders with Taiwanese packaging equipment suppliers like Grand Plastic, Scientech, and Marketech, requesting expedited shipments to the U.S.

Responding to Potential Tariff Pressure: Customers and Supply Chain Move in Sync

TSMC's accelerated plant construction is driven by pressure from major U.S. customers and increased policy risks. American tech giants like Apple, NVIDIA, AMD, and Qualcomm all hope their supply chains can increase U.S. manufacturing to mitigate the potential cost impact of tariffs.

Industry insiders reveal that TSMC has asked partners responsible for plant engineering, such as CTCI and L&K Engineering, to expedite the transportation and installation of infrastructure like cleanrooms and chemical pipelines, aiming to complete the plant's foundational engineering by the end of 2025 and immediately begin plant construction.

Additionally, TSMC's past strategy of "three wafer fabs paired with one advanced packaging plant" is also being followed in this U.S. expansion. The industry is optimistic that with the start of the advanced packaging plant, related equipment suppliers like Grand Plastic, Scientech, Marketech, and Kinik will benefit from TSMC's increased investment in the U.S.

U.S. Tariff Policy Shift: Semiconductors Take Center Stage

The U.S. government has recently made significant changes to its tariff policy on tech products. Although the U.S. Customs and Border Protection (CBP) announced on April 11 a temporary exemption for 20 categories of electronic products, including smartphones, laptops, and chips, U.S. Commerce Secretary Raimondo stated on April 13 that these exemptions are only "temporary" and will be included in the "semiconductor tariffs" category, expected to be implemented in one to two months.

Raimondo noted that these products will be classified as semiconductor-related items and subject to "special targeted tariffs" to encourage manufacturing to return to the U.S. She emphasized, "We need to manufacture chips, tablets, and other key tech products in the U.S. and can no longer rely on Southeast Asia."

According to White House officials, the Trump administration will invoke Section 232 of the Trade Expansion Act to launch a national security investigation into semiconductor imports, potentially imposing high tariffs. This section has been used to tax steel and automobiles and is highly enforceable.

Industry Simulates Three Major Tariff Scenarios

Facing the impending semiconductor tariffs, the industry has begun simulating possible taxation models:

  1. Reservoir Model: Tax based on the difference between a company's global capacity and U.S. domestic capacity. For example, TSMC's global annual capacity exceeds 16 million 12-inch wafers, while the U.S. plant initially only about 500,000 wafers. Taxing based on this difference could result in extremely high rates.

  2. Imported Chip Taxation: Directly taxing chips imported into the U.S., impacting EMS (Electronic Manufacturing Services) companies like Foxconn and Quanta, which need to import chips for assembly.

  3. Finished Product Chip Content Taxation: Taxing all end products containing semiconductor components, such as laptops, phones, and servers. This model covers a wide range but is challenging to implement and trace.

The industry generally believes that no matter which model is adopted, it will have a profound impact on the global semiconductor supply chain. TSMC's accelerated U.S. plant construction aims to gain a foothold before the policy takes effect, reducing potential future tax burdens.

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People Also Ask...

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Taiwan Semiconductor Manufacturing Company (TSMC)'s investment in the United States has increased to $165 billion. How will this affect the semiconductor market?

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What impact does TSMC's expansion plan in Arizona have on the local community?

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TSMC's massive investment in the U.S., can it really help them avoid U.S. semiconductor tariffs?