Taiwanese authorities have announced that Taiwan Semiconductor Manufacturing Company (TSMC) will not be subjected to potential 100% tariffs on chip imports to the United States, a development attributed to the company's significant manufacturing presence within the US. The announcement, reported by Bloomberg, also suggested that United Microelectronics Corporation (UMC) may experience a reduced impact from tariffs due to its cooperation with Intel.
The prospect of high tariffs on Taiwanese semiconductors emerged from threats by the Trump administration, which aimed to incentivize domestic chip production and reduce reliance on foreign supply chains. President Donald Trump had previously indicated that companies establishing manufacturing facilities in the US, like TSMC, would avoid such levies. As stated in the Bloomberg report, > "Taiwan says TSMC will not have to pay 100% tariffs on US chip imports, as it has set up US plants."
TSMC has committed substantial investments in the United States, particularly in Arizona, where it is developing three advanced fabrication plants. The total investment is projected to reach $65 billion, with potential for further expansion up to $165 billion for additional facilities, including advanced packaging. The first Arizona fab is on schedule to begin production of 4-nanometer chips in the first half of 2025, with engineering wafer production already underway since April 2024. Subsequent fabs are planned for 2-nanometer technology, commencing production in 2028 and beyond.
The Taiwanese government has consistently emphasized the complementary nature of the US-Taiwan semiconductor relationship, advocating for a "win-win" model. TSMC's US investments have been bolstered by significant support from the US CHIPS and Science Act, including a $6.6 billion subsidy and up to $5 billion in loans, underscoring Washington's strategic interest in localizing advanced chip manufacturing.
While the primary focus of tariff avoidance centers on TSMC's direct US investments, the Bloomberg report noted that > "UMC may see reduced impact through its cooperation with Intel." Details regarding the specific mechanisms through which UMC's collaboration with Intel would mitigate tariff effects are less clear, but it points to broader strategies within the Taiwanese semiconductor industry to navigate evolving US trade policies. The establishment of US facilities by leading chipmakers like TSMC is seen as a critical step in strengthening global supply chain resilience and fostering advanced technology ecosystems within the United States.