Chris Miller: TSMC plays its hand in Donald Trump’s tariff war

March 6, 2025

The Taiwanese chipmaker’s attempt to keep the US president on side is not without risks

“I’m a little bit nervous,” admitted CC Wei, the CEO of Taiwanese chipmaker TSMC, taking the podium at the White House this week as he announced the largest foreign investment in American history. The entire chip industry has been nervous while watching President Donald Trump’s tariff escalation. Trump has threatened retaliation against Taiwan for having “stolen” US business. Yet TSMC is doubling down on its US manufacturing footprint with a new $100bn commitment.

What exactly is TSMC planning to build? In addition to the chip plants — called fabs — already on their Arizona campus, TSMC will add three more. The company will also build two advanced packaging plants and an R&D facility. The timeline, capacity, and technology capabilities of these plants is not clear, but TSMC says they will produce AI chips. Even if the new plants have a similar volume to TSMC’s current facility, the US operations would still be a small share of the company’s overall production, though a higher share of its advanced manufacturing.

This investment cements America’s position as a significant player in advanced chipmaking, behind only Taiwan and South Korea. TSMC’s customers — mostly big US chip designers like Nvidia, Apple, and AMD — will welcome the further geographic diversification of its manufacturing operations. Yet they will also ask about the cost. TSMC has learnt efficiencies during its time in the US, but its manufacturing there is still more expensive than in Taiwan. Both TSMC and its customers may now avoid tariffs, but they will find themselves with higher manufacturing costs instead.

Still this announcement poses tough questions for Samsung and Intel, the two other primary manufacturers of advanced processors, who have pitched themselves as reliable suppliers with less exposure to China-related risk. As TSMC’s US footprint grows, this argument gets harder to make.

Has this investment addressed America’s fears of being cut off from Taiwan’s chipmaking capabilities? Standing alongside Wei, Trump noted pointedly that TSMC’s new plants would be built in a “very safe place”. Yet even $100bn only goes so far in the capital intensive semiconductor supply chain. Products like smartphones and consumer electronics will probably remain entrenched in Taiwan and China.

Read the full article in the Financial Times.

Chris Miller is an excellent keynote speaker, offering deep insights into the geopolitical and economic implications of the semiconductor industry. His expertise helps audiences understand the strategic importance of investments like TSMC’s $100 billion expansion in the U.S. and its impact on global supply chains. Chris’s ability to break down complex topics makes him a sought-after voice in discussions on technology and policy.

Chris Miller’s speaking engagements are managed exclusively by WWSG. To host him for your event, contact us.

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