As part of the recently concluded trade arrangement between the U.S. and Taiwan, Taiwanese companies including TSMC will invest $250 billion in the U.S. in exchange for exemptions from potential chip tariffs, Financial Times reports.
Limited disclosure around the terms of this commitment has introduced major uncertainties regarding TSMC's future capital spending, manufacturing allocation, and long-term strategy, however. And meanwhile, a market rumor suggests that TSMC may invest an additional $100 billion in its U.S. facilities, bringing its total commitments to $265 billion — and making TSMC one of the biggest ever investors in America.
The $250 billion figure largely reflects previously announced plans, and TSMC is projected to be the biggest spender. The company has already committed $165 billion to its Fab 21 campus in Arizona, which includes six fab modules, two advanced packaging facilities, and a research and development center. According to U.S. commerce secretary Howard Lutnick, roughly $100 billion of TSMC’s existing commitments are included in the investment total, and TSMC's supply chain partners are projected to contribute about $30 billion.
According to market rumors, TSMC may invest an additional $100 billion to construct four more fab modules in Arizona in a bid to avoid tariffs. TSMC's recent acquisition of approximately 900 acres of land adjacent to its existing 1,100-acre site supports the possibility of expansion on that scale.
Other Taiwanese companies, including Foxconn, are expanding U.S. capacity to assemble AI servers, though these projects are considerably less capital-intensive and are expected to total no more than $20 billion, according to Financial Times.
The arrangement reportedly allows companies building U.S. facilities to import chips tariff-free at up to 2.5 times the planned capacity during construction, followed by a reduced quota equivalent to 1.5 times capacity once production begins, Financial Times reports. Analysts say that once the new fabs finish construction, the temporary rule allowing higher tariff-free import volumes will expire. After 2032, this could leave TSMC without enough U.S. capacity to keep all shipments to American customers exempt from tariffs, which is why the company may need to build additional fabs by around 2035 to maintain full tariff-free coverage, according to Financial Times.
Even if the Arizona complex ultimately reaches its theoretical capacity — 10 fab modules, at least two advanced packaging facilities, and an R&D center — TSMC's presence in the U.S. is poised to remain considerably smaller than its operations in Taiwan. For now, TSMC estimates that up to 30% of its chips on N2 (2nm-class) and more advanced process technologies will be made in America. Taiwanese officials have rejected suggestions that 40% - 50% of semiconductor production on the island could shift overseas, particularly to the U.S.
It should be noted that only $8.2 billion of Taiwan’s $198 billion in exports to the U.S. in 2025 consisted of standalone semiconductors. Most chips made in Taiwan enter the U.S. being installed into finished goods spanning from smartphones to AI servers, which greatly complicates tariff enforcement as importers may struggle to identify or report the value of individual chips. As a result, many observers wonder whether such tariffs could be practically collected.
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