President Trump on Monday said Taiwan Semiconductor Manufacturing Company, the world’s largest chip manufacturer, will spend $100 billion in the United States over the next four years to expand its production capacity and bring its most advanced semiconductor processes to its operations in Arizona.
The investment will allow TSMC to begin making artificial intelligence and smartphone chips in Arizona, Mr. Trump said.
With the commitment, TSMC brings its planned total spending in the United States to $165 billion. The money will expand the company’s footprint in Arizona from three manufacturing plants to five, add 25,000 jobs and create a research and development center to develop future production processes.
TSMC’s expansion comes after years of work to rev up domestic manufacturing of semiconductors. For more than five years, Washington officials have been concerned that TSMC’s dominance of the chip industry had created a national security risk. They feared that the United States could lose access to those advanced chips, which were produced in Taiwan, because Beijing wants to reclaim the island as part of China.
The previous Trump administration began to lobby TSMC to build plants in the United States. The Biden administration advanced those efforts by passing the CHIPS Act, a bipartisan bill that provided $39 billion in federal funding for the construction of new and expanded manufacturing facilities to make the tiny electronics that power everything from cars to iPads.
During a White House event, Mr. Trump said that TSMC’s investment would reduce America’s national security risk and encourage other companies to make more of their products in the United States.
“Semiconductors are the backbone of the 21st century economy, and really without the semiconductors, there is no economy,” Mr. Trump said, adding that “we must be able to build the chips and semiconductors that we need right here in American factories, with American skill and American labor.”
Appearing alongside Mr. Trump, C.C. Wei, TSMC’s chief executive, said the company would begin making A.I. chips and smartphone chips in the United States. He added that the factory expansion had been supported by American customers, including Apple, Nvidia, AMD, Qualcomm and Broadcom.
Mr. Trump said the investment would help TSMC avoid tariffs of 25 percent or more on chips manufactured in Taiwan. Since taking office in January, he had threatened tariffs of 100 percent on Taiwanese chips and criticized the CHIPS Act for failing to get companies like TSMC to make more chips domestically.
Since Mr. Trump took office in January, TSMC and Taiwanese officials have been scrambling to respond to his tariff threats. In January, Mr. Wei met with Howard Lutnick, the commerce secretary, about investments that TSMC could make. They explored the possibility of TSMC’s investing in the U.S. chipmaker, Intel, in a deal that would see it take over the Silicon Valley icon’s manufacturing operations. Taiwanese officials also traveled to Washington and floated deals to invest in the United States.
The investment more than doubles TSMC’s commitment to the United States and increases the capabilities of the chips it produces in Arizona.
Under the CHIPS Act, TSMC had committed to invest $65 billion to build three factories in Arizona. The production process it had committed to bringing to the United States is a legacy technology that makes less sophisticated chips than the ones it produces in Taiwan. It received $6.6 billion in federal funding to support the project.
With its appearance on Monday, TSMC will become the latest in a string of companies to visit the White House and make investment commitments. In January, OpenAI, Oracle and SoftBank promised to spend $500 billion on data centers over the next four years. Last month, Tim Cook, Apple’s chief executive, met with Mr. Trump before the company committed to spending $500 billion over four years, with some of that support going to a new factory in Houston to make artificial intelligence servers.
“They’re coming here in huge size because they want to be in the greatest market in the world, and they want to avoid the tariffs,” Mr. Lutnick said at the event on Monday. “If they’re not here, they’d have to suffer.”