Taiwan Semiconductor Manufacturing Company has pledged to spend an additional $100 billion building data centres in the U.S., bringing total spend up to $160 billion. The investment will go into building three new fabrication plants in Phoenix, Arizona, as well as two packaging facilities and a research center.
TSMC has dubbed it the “largest single foreign direct investment in U.S. history,” and says the build itself will create 40,000 construction jobs at the Fab 21 complex over the next four years. Once up and running, tens of thousands of new “high-paying, high-tech” jobs in chip manufacturing and research will be added while generating over $200 billion in indirect economic output nationwide.
TSMC’s history in the U.S. started in 2020, when it committed $12 billion to build its first Arizona factory. It raised this figure to $40 billion in 2022 with the announcement of a second fab, and then $65 billion last April with a third. The long-term benefits may not be felt for a while, though, as the second factory’s opening date is still set for 2027 or 2028.
U.S. President Donald Trump said that the new investment will “boost America’s dominance in artificial intelligence and beyond,” and refers to it as a matter of economic and national security.
Trump has changed his tune with chip companies like TSMC since taking office
Onshoring the entire supply chain for semiconductors that power AI and other technologies has been a priority for the U.S. even prior to the current Trump administration.
In 2022, after the brunt of the global chip shortage had passed, then-President Joe Biden passed the CHIPS Act, allocating $52 billion in subsidies and tax incentives to support semiconductor research and manufacturing. This aimed to shield it from the supply chain risks posed by geopolitical tensions.
The first major subsidy to be made under the CHIPS Act was to TSMC in November 2024 for $6.6 billion. At the time, Trump’s campaign team deemed this and other last-minute awards by Biden “wasteful.” Trump also accused TSMC of stealing America’s chip businesses on a podcast, threatening to impose tariffs if he were to win the election.
Nevertheless, since taking office, he has made a number of moves to strengthen relationships with AI chip companies. This week, it was reported that TSMC and Broadcom are in talks to take over some of Intel’s U.S. chipmaking factories with encouragement from the Trump administration, according to The New York Times.
Apple also announced that it will spend $500 billion on manufacturing and research in the U.S. over the next four years. In the press conference for this week’s TSMC investment, the 78-year-old president added that there are still “many (more) that want to announce.”
Furthermore, despite prior threats of tariffs, President Trump highlighted at the press conference that TSMC’s choice to diversify in the States puts it “way ahead of the game” as it will be exempt. Last month, he announced plans to impose a 25% tariff on imported semiconductors, which could come in as soon as April.
But this welcoming approach to chip companies contrasts with recent Bloomberg reports suggesting that Trump plans to cut two-fifths of the staff at the CHIPS Act Office.
