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President Donald Trump announced on Monday that Taiwan Semiconductor Manufacturing Company (TSMC) will invest $100 billion in new manufacturing plants in the United States.

The announcement, made in the White House Roosevelt Room alongside TSMC CEO CC Wei, marks one of the largest foreign investments in US semiconductor production to date.

"Today, Taiwan Semiconductor is announcing that they will be investing at least $100 billion in new capital in the United States over the next short period of time to build state-of-the-art semiconductor manufacturing facilities," Trump stated.

He indicated that most of the investment will be directed toward Arizona, a state where TSMC has already begun construction on advanced chip fabrication plants.

The investment is expected to significantly boost domestic semiconductor production, reducing US reliance on foreign-made chips.

According to CBS News,Trump emphasized the importance of the initiative for both economic and national security. "Semiconductors are the backbone of the 21st-century economy," he said. "And really, without semiconductors, there is no economy, powering everything from AI to automobiles to advanced manufacturing."

The Wall Street Journal first reported the investment, which follows previous U.S. government efforts to incentivize semiconductor manufacturing.

Under the Biden administration, TSMC was awarded $6.6 billion in funding through the CHIPS and Science Act of 2022, facilitating the expansion of its Arizona operations.

Now, Trump's administration is leveraging trade policies and tariffs to encourage further investment.

Trump noted that if TSMC were to manufacture chips in Taiwan and export them to the US, they would be subject to a 25% tariff, making US-based production a more attractive option.

TSMC to Produce Cutting-Edge 2nm and A16 Chips in Arizona by 2028

Commerce Secretary Howard Lutnick credited these tariffs with influencing TSMC's decision.

"Under the Biden administration, TSMC received a $6 billion grant, and that encouraged them to build $65 billion. So America gave TSMC 10% of the money to build here. And now you're seeing the power of Donald Trump's presidency," Lutnick said.

"TSMC, the greatest manufacturer of chips in the world, is coming to America with a hundred-billion-dollar investment."

TSMC is the world's largest contract chipmaker, supplying companies such as Apple and Nvidia. The company has already committed to producing 2-nanometer chips at its Arizona plant, which is expected to be operational by 2028, VOA said.

TSMC has also pledged to implement its most advanced chip manufacturing technology, known as A16, in the US.

This investment follows a series of major economic commitments from multinational companies looking to establish a stronger presence in the US In recent months, Apple announced a $500 billion investment, and SoftBank has pledged multibillion-dollar contributions to American industries.

With tensions rising over Taiwan's strategic role in the semiconductor industry, the US government has pushed for greater domestic production to mitigate security risks.

China's ongoing claims over Taiwan have raised concerns about the stability of chip supply chains, making TSMC's decision to expand in the US particularly significant.

TSMC has received up to $5 billion in low-cost government loans as part of its agreement. The company has already started producing advanced 4-nanometer chips in Arizona, with further expansion on the horizon.

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