Taiwan Semiconductor Manufacturing Company (TSMC) has announced a $100 billion investment to expand its semiconductor operations in Arizona, marking the largest single foreign direct investment in U.S. history. The funds will support three new fabrication plants, two advanced packaging facilities, and a research and design center, bringing TSMC’s total investment in the U.S. to $165 billion. This move aligns with President Donald Trump’s push to reduce reliance on chips made in Taiwan, which dominate global production, and follows incentives from the CHIPS and Science Act. TSMC’s Arizona facilities aim to produce advanced chips, including 4nm, 3nm, and 2nm technologies, bolstering the U.S. semiconductor ecosystem and AI supply chain. However, questions remain about whether this investment will exempt TSMC from Trump’s proposed tariffs on imported chips and whether CHIPS Act funding will continue under his administration. In Taiwan, concerns persist about the potential “hollowing out” of its semiconductor industry and the impact on national security. While the investment strengthens U.S.-Taiwan ties, broader geopolitical dynamics, including U.S. commitments under the Taiwan Relations Act, will continue to shape the relationship. — news from Council on Foreign Relations
