TSMC Confident in U.S. Support for Arizona Plants Under Trump Administration

Taiwan Semiconductor Manufacturing Co. (TSMC) is optimistic about the ongoing support from the U.S. government for its Arizona chip production facilities, even with President-elect Donald Trump taking office. This assurance comes despite Trump's past comments criticizing Taiwan's semiconductor industry.

Recent Developments: According to TSMC's CFO Wendell Huang, the company has already received its initial $1.5 billion from the $6.6 billion promised through the CHIPS Act during the last quarter of 2024. This funding is part of the broader $53 billion initiative led by the Biden administration, aimed at bolstering domestic semiconductor manufacturing.

Huang mentioned, "In the fourth quarter, we already received the first batch of government support,” and emphasized that subsequent funding would be linked to achieving construction and production targets.

Despite Trump’s prior rhetoric, which accused Taiwan of “stealing” U.S. chip business and critiqued the expenses associated with the CHIPS Act, industry analysts believe the initiative will likely continue due to strong bipartisan backing for advancing semiconductor production in the U.S.

The investment made by TSMC in Arizona exceeds $65 billion and will encompass three facilities, playing a vital role in U.S. efforts to enhance its chip manufacturing capabilities. The company's first Arizona fabrication plant began producing advanced chips in the fourth quarter of 2024, although some delays occurred. A second facility is projected to become operational in 2028.

CEO Insights: The CEO of TSMC, C.C. Wei, affirmed the company's longstanding and positive relationship with U.S. governmental authorities during a recent earnings call. He indicated that TSMC has been reporting record profits for the fourth quarter, largely due to the increase in demand for AI chips. Although Wei chose to abstain from attending Trump's inauguration, he reassured stakeholders of maintaining clear and honest communication with current and future administrations.

Challenges do exist for TSMC in expanding its operations in the U.S. These include prolonged construction timelines resulting from regulatory demands and a shortage of skilled labor. Nevertheless, Wei expressed optimism that TSMC could eventually meet the same quality standards in its Arizona facilities as it does in Taiwan.

Additionally, TSMC anticipates its revenue from AI-related products to double by 2025, following a tripling in 2024. This projection highlights the strategic importance of TSMC's U.S. operations in addressing the increasing demand for advanced chips.

In a comment made in July, Trump stated that Taiwan should take on the burden of its defense costs, implying that they benefited from U.S. interests, saying, "I know the people very well, respect them greatly. They did take about 100% of our chip business. I think Taiwan should pay us for defense."

TSMC, Trump, Semiconductors