Taiwanese chip companies are expected to invest at least $250bn in the US.
A new bilateral deal will see Taiwanese semiconductor manufacturing capabilities “reshoring” to the US, building on the country’s aggressive bid to become a leading chip manufacturer.
As part of the deal announced yesterday (15 January), Taiwanese chip manufacturers will be making new investments in the US totalling at least $250bn. Taiwan has also agreed to provide a further $250bn in credit guarantees to facilitate additional investments from companies.
In exchange, US “reciprocal” tariffs applied to Taiwanese goods will be capped at 15pc, down from 20pc. US Section 232 duties applied to Taiwanese auto parts, timber, lumber and wood derivative products will also be capped at 15pc.
Meanwhile, the US will also apply a 0pc reciprocal tariff to other Taiwanese products such as generic pharmaceuticals, aircraft components and unavailable natural resources.
Speaking to CNBC news, US commerce secretary Howard Lutnick said that Taiwan Semiconductor Manufacturing Corporation (TSMC) has bought land and could expand in Arizona as part of this new deal.
While a TSMC spokesperson told the outlet that the company’s investment decisions are based on market conditions and customer demands.
In a recent interview with Bloomberg, TSMC company chief financial officer Wendell Huang said: “The most leading-edge technologies will be run in Taiwan because of practical reasons.
“We’re expanding in the US, accelerating where it is possible,” he added.
Lutnick told CNBC that Taiwanese chipmakers that don’t build in the US are likely to face a 100pc tariff, echoing statements US president Donald Trump made months ago. The commerce secretary added that the US plans to bring 40pc of Taiwan’s semiconductor supply chain to the US.
TSMC has already planned to invest $165bn to build its capacity in the US, including a $100bn promised spend on its Arizona fab announced last year. Lutnick said that investments into the Arizona fab are included in the new agreed investment.
And sources told Bloomberg that TSMC plans to build at least four more chipmaking plants – in addition to the six already planned – requiring an additional $100bn in capital.
In 2024, the chipmaker pledged $65bn to its US operations, receiving a grant of $6.6bn under the US Chips and Science Act – which aims to boost US semiconductor research, development and production.
The new deal announced this week includes other exceptions for Taiwanese companies building new chip fabs in the US, including the ability to import up to two and a half-times the planned capacity without Section 232 duties during construction and one and a half times after construction.
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