TSMC starts building third Arizona plant as US tariffs loom

[TAIPEI] Taiwan Semiconductor Manufacturing Company (TSMC) has begun construction on a third chip plant in Arizona, ramping up its US expansion as the Trump administration threatens further tariffs to spur American manufacturing.

The world’s most advanced chipmaker announced the third phase of its US expansion the same day Commerce Secretary Howard Lutnick toured TSMC’s site, which the company called the single largest foreign investment in US history.

TSMC, the main chipmaker to Apple and Nvidia, is the centrepiece of the US government’s effort to entice manufacturing back home. Lutnick has signalled he could withhold promised Chips Act grants as he pushes companies in line for federal semiconductor subsidies to substantially expand their US projects, Bloomberg News has reported.

In March, TSMC chief executive officer C C Wei joined Trump at the White House to unveil plans to invest an additional US$100 billion in US plants that will boost its output on American soil. The spending adds to US$65 billion in planned TSMC investments in the US and would eventually bring its American presence to a half-dozen plants for advanced wafer fabrication and a couple more for advanced packaging.

Lutnick told CNBC in an interview on Tuesday the Trump administration was able to get the additional US$100 billion investment without any promise of subsidies. “You know what the Trump administration paid for that? Zero. It’s tariffs that brought that in. So 40,000 of construction employees, and then 20,000 full-time employees, here for the far-distant future as we bring semiconductors here. This is the point of the Trump tariff model,” he said.

TSMC’s CEO said on an earnings call in April that the construction of the second plant in Arizona was already completed and the company was working on speeding up the production schedule. The company previously said that the first factory entered high-volume production in the fourth quarter of last year with yields comparable to Taiwan factories.

Wei added that the third and fourth plants will use its most advanced N2 and A16 process technologies and the fifth and sixth plants will use even more advanced technologies. BLOOMBERG