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TSMC warns US chip tariffs could derail $165 billion Arizona investment

TSMC warns proposed U.S. chip tariffs could threaten its $165 billion Arizona investment. Pictured: TSMC's silicon wafer (Image source: TSMC)
TSMC warns proposed U.S. chip tariffs could threaten its $165 billion Arizona investment. Pictured: TSMC's silicon wafer (Image source: TSMC)
TSMC has urged the U.S. Commerce Department to exempt chip imports from new tariffs, warning that duties could undercut its $165 billion Arizona expansion and threaten U.S. semiconductor leadership.

Taiwan Semiconductor Manufacturing Co. (TSMC) has asked the U.S. Department of Commerce to exclude semiconductor imports from new Section 232 tariffs. The company argues that higher duties would depress downstream demand and “jeopardize current U.S. leadership” in the sector. The request was made in a May 5 letter sent by TSMC’s Arizona subsidiary during the department’s comment period on potential trade measures.

The company is already spending $65 billion on three wafer fabs in Phoenix—one is in volume production, the second is nearing completion, and the third broke ground last month. In March, it pledged another $100 billion for three additional fabs, two advanced-packaging plants and an R&D center, bringing the total commitment to $165 billion.

TSMC told regulators that tariffs lifting end-product prices would cut chip demand and undercut the economic case for the Arizona cluster. It asked that firms with “substantial U.S. semiconductor production” keep duty-free access to overseas equipment and materials, many of which are unavailable domestically.

The letter arrives as the Commerce Department prepares its Section 232 report, expected shortly after May 26. Former president Donald Trump has floated tariffs of up to 100 percent on chips made in Taiwan, claiming the island “stole” U.S. business.

According to the filing, Arizona could turn out 100,000 wafers per month when all six fabs are operational—roughly 30 percent of TSMC’s forecast capacity at 2-nanometer and more advanced nodes. The company estimates its U.S. venture will generate $200 billion in indirect economic activity and tens of thousands of jobs. Those gains, it argues, depend on predictable, tariff-free supply chains.

Source(s)

Focus Taiwan (in English)

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> Expert Reviews and News on Laptops, Smartphones and Tech Innovations > News > News Archive > Newsarchive 2025 05 > TSMC warns US chip tariffs could derail $165 billion Arizona investment
Nathan Ali, 2025-05-27 (Update: 2025-05-27)