Last month, Commerce Secretary Howard Lutnick mentioned the possibility of imposing "semiconductor tariffs" on smartphones, computers, chips, and other related items. TSMC, a leading chip manufacturer, has issued a warning to the Trump administration, stating that any tariffs on chips produced in Taiwan and exported to the U.S. could impact its operations. With plans to invest billions in expanding its Arizona facilities, TSMC is playing hardball by hinting at potential changes to its expansion strategy if tariffs are imposed.
Originally, TSMC committed to investing $165 billion in constructing multiple fabs in Arizona. However, the company has made it clear that if tariffs are implemented, it may reconsider the pace or even cancel the remaining investment. TSMC's threat underscores the importance of exempting chip manufacturers like itself from any import restrictions to encourage continued investment in U.S. manufacturing.
In a letter to the U.S. Commerce Department, TSMC emphasized the impact of tariffs on its American customers, highlighting the potential decline in demand for its manufacturing services. The company's ongoing construction of a cutting-edge plant in Arizona, set to produce advanced 2nm and A16 chips, is at risk if tariffs are enforced.
The Arizona facility holds strategic importance for both the U.S. semiconductor industry and TSMC's global operations. With the capacity to meet a significant portion of U.S. chip demand, the plant's expansion could be jeopardized if tariffs disrupt TSMC's plans. The standoff between TSMC and the Trump administration over semiconductor tariffs raises concerns about the future of chip manufacturing in the U.S.
