[Insights] Trump’s Chip Tariffs Shake Up the Game: Dive Into TSMC’s Huge U.S. Investment Plans

On February 13, 2025, U.S. President Donald Trump officially signed the “Reciprocal Tariffs” presidential memorandum, aiming to ensure “fair trade” for the U.S. in international commerce. According to TechNews, the key principle of this policy is that the U.S. will impose reciprocal tariffs on countries that either levy higher tariffs on American goods or have significant trade deficits with the U.S. Countries potentially affected include China, India, Mexico, Vietnam, the European Union (particularly Germany), Taiwan, and several East Asian countries

The potential impact of this policy on Taiwan’s semiconductor industry has drawn significant attention. Trump has explicitly stated that tariffs on Taiwan’s semiconductor industry could reach as high as 100%. Given Taiwan’s central role in the global semiconductor supply chain, if this policy is implemented, it could severely impact Taiwan’s semiconductor industry’s competitiveness in the global market and trigger a ripple effect on the U.S. technology sector.

The Potential Impact on U.S. Semiconductor Prices

Notably, as highlighted in the TechNews report, a 2023 report from the U.S. Congressional Research Service (CRS) noted that 44.2% of the logic chips and 24.4% of the memory chips used in the U.S. are from Taiwan.

TrendForce points out in its latest report titled “Updates and Impacts Related to Effects of Trump Administration’s Tariffs on Canada, Mexico, China, and Taiwan” that if Taiwan’s semiconductor supply is severely disrupted, logic chip prices in the U.S. market could surge by up to 59%. This would trigger a chain reaction, driving up the costs of various electronic products, including smartphones, laptops, and servers, leading to significant price hikes in both consumer and enterprise markets.

Given the severe economic consequences this policy could trigger, Trump’s tariff plan is widely regarded as a form of political pressure on TSMC. Following that, TSMC has announced it’s increasing investment in U.S. advanced semiconductor manufacturing, bringing the total to US$165 billion.

TrendForce’s latest findings reveal that mass production is expected to begin after 2030 if the three newly planned fabs proceed on schedule. The U.S., which has been actively expanding its advanced semiconductor capacity, is projected to hold 22% of the global market share by 2030.

TrendForce notes that TSMC first announced plans for its Arizona fab in 2020 as part of a six-fab expansion strategy, aiming to mitigate geopolitical risks. However, escalating trade tensions and tariff issues have forced the company to accelerate its expansion timeline.

Could TSMC’s U.S. Operations Become a Separate U.S. Company?

According to TrendForce, if increased investment alone is not enough to satisfy the U.S. government, TSMC may also consider spinning off its U.S. operations into a separate, publicly traded company in the U.S.. This approach would allow TSMC to retain technological leadership while securing U.S. government and market capital investment. However, it would also mean losing some control over its U.S. operations, which could have long-term implications for the company’s autonomy.

Read more

• [News] TSMC’s U.S. Investment Could Lead to 15% Price Hike, with AMD and NVIDIA Cheering on the Expansion
• [News] TSMC’s $100B U.S. Bet: Six Big Questions Behind the Largest Foreign Investment in U.S. History
• [News] TSMC Scales up U.S. Investment with $100B More, Adding Five New Chip Facilities in Coming Years

(Photo credit: TSMC)