Taiwan's Semiconductor Manufacturing Company or TSMC in short, which manufactures half of the world's semiconductors said its US investment plan is secured following the election of Donald Trump as president.
The leading chipmaker has announced $65 billion in investments to build new semiconductor plants in Arizona, an important step toward increasing its presence in the United States.
TSMC Confirms Plans for US Investment Amid Political Change
As Reuters reports heading to Friday, Nov.8, TSMC assured investors and stakeholders that their plans in the US are not affected by Trump's election and his prior criticism that Taiwan was "stealing American semiconductor business."
"Our investment plan in the US remains unchanged," TSMC wrote recently in an email without going any deeper into the matter.
The critical investment TSMC has in the US market shows its strategy is to balance semiconductor production globally as demand increases and with geopolitical challenges. This investment falls within the long-term aim of the firm to increase its footprint outside Asia and enhance production as a means of meeting the trend of increasing global demand for advanced semiconductors.
Support for Chips and Science Act for Semiconductor Production in the US
In 2022, the Biden administration passed the Chips and Science Act, providing $37 billion to encourage chipmakers to boost their internal US production, reducing reliance on foreign assembly.
Officials familiar with the matter said TSMC will join GlobalFoundries and another unnamed chipmaker in receiving a last wave of funding under the act.
The Chip Act will focus on attracting even more chipmakers to establish and increase their operations on U.S. soil, which would further secure the semiconductor supply chain of the nation.
The Act will require the Commerce Department to notify Congress at least 15 days prior to its finalizing any award valued more than $10 million under the Chips Program Office. It shied away from comments over TSMC's and GlobalFoundries' as notification to the congress is only a step to the conclusion that does not seal the award terms.
Fundamental Investments in Arizona, Vermont, and New York
This is an expansion that goes hand in hand with a preliminary subsidy worth $6.6 billion for a TSMC facility in Phoenix, Arizona that it won earlier this year. The company aims to keep up with the state-of-the-art semiconductor demand in the U.S.
Another leading chipmaker, GlobalFoundries, received $1.5 billion in state subsidy to build a new semiconductor production plant in Malta, New York, and to add 30 percent to its manufacturing capacity in Burlington, Vermont.
According to SCMP, the federal support provided to both TSMC and GlobalFoundries continued its effort to strengthen and maintain a stronger semiconductor industry, an increasingly important asset in the increasingly aggressive global market for high-performance chips.
Political Disputes Surrounding the Chips Act
The Chip's Act has received broad, bipartisan acclaim. Yet Donald Trump, recently appearing on The Joe Rogan Experience in October, seemed to assail the Act, which he said favored big businesses too much.
"When I see us paying a lot of money to have people build chips, that's not the way," Trump said. "You didn't have to put up 10 cents. You could have done it with a series of tariffs. In other words, you tariff it so high that they will come and build their chip companies for nothing."
House Speaker Mike Johnson also seemed open to the possibility of repealing the Act if the Republicans become the majority force in Congress. When asked if he would be receptive to its repeal, Johnson said this was possible, but then seemed to either mishear or rescind what he said.
TSMC and Chip Industry Stocks Continue Great Ride
Contradictions abound in US politics, but that did little to halt the uptick TSMC stock enjoys amid surging semiconductor demand triggered fundamentally by AI technology advancements this year.
Recently, TSMC American Depositary Receipts leaped 4.1% following the earnings surprises reported by Nvidia Corp that took it through a rare market valuation threshold of $3.6 trillion.
The stabilization in the share price of TSMC can thus be indicated by investor confidence in the continued growth of the semiconductor industry, further supported by breakthroughs from AI and other technology innovations requiring such high-performance chips.
