TSMC Confident in U.S. Support for Arizona Plants Despite Trump's Criticism

Taiwan Semiconductor Manufacturing Co. (TSMC) is optimistic about receiving ongoing U.S. government backing for its semiconductor plants in Arizona, even with the incoming administration of President-elect Donald Trump and his past remarks about the Taiwanese chip industry.

What Happened: During a CNBC interview, TSMC's CFO Wendell Huang confirmed that the company has already received an initial payment of $1.5 billion from the CHIPS Act, part of the overall $6.6 billion funding promised. This support aligns with President Joe Biden’s initiative to invest $53 billion to bolster domestic semiconductor production.

“In fact, we already received the first government support in the fourth quarter,” said Huang, highlighting that additional funds will be dispersed based on achieving construction and production milestones.

Despite Trump's campaign statements, where he accused Taiwan of "stealing" U.S. chip business and criticized the CHIPS Act for its costs, industry experts believe that the initiative will largely continue under his administration due to bipartisan commitment to domestic semiconductor production.

TSMC's ambitious investment in Arizona, totaling over $65 billion for three facilities, is a vital component of U.S. efforts to enhance domestic chip manufacturing capabilities. The first chip manufacturing plant in Arizona started producing advanced chips in late 2024 after some delays, with a second facility expected to begin operations in 2028.

Further Developments: TSMC’s CEO C.C. Wei highlighted the company’s strong relationship with U.S. authorities during their recent earnings call, where the firm reported record profits driven by the rise in demand for AI chips. Even as TSMC chose to skip Trump's inauguration, Wei reassured investors of the company's commitment to maintaining open dialogues with both current and future administrations.

While TSMC faces challenges regarding its U.S. expansion—such as regulatory hurdles and a shortage of skilled labor—Wei remains confident that the Arizona facilities will meet the high standards established in Taiwan.

The timing of this support comes as TSMC anticipates a significant boost in its AI-related revenue, predicting a doubling of earnings by 2025 after a projected tripling in 2024. This underscores the strategic importance of TSMC’s U.S. operations as it seeks to meet the growing demand for advanced chips.

Notably, Trump's earlier remarks in July indicated he believed Taiwan benefits significantly from the chip market, stating, "I respect the people of Taiwan greatly. They did take about 100% of our chip business. I think, Taiwan should pay us for defense."

TSMC, Trump, Semiconductors