TSMC's $100 billion investment in the US: Strategic considerations and Potential implications

Recently, TSMC announced that it will invest an additional 100 billion US dollars in the United States to build multiple semiconductor factories and research and development centers.TSMC's investment of 100 billion US dollars in the United States is driven by profound strategic considerations and will have a far-reaching impact on the global semiconductor industry landscape.

As the world's largest semiconductor manufacturer, TSMC holds a pivotal position in the chip manufacturing sector. This additional investment of 100 billion US dollars represents another major move by TSMC in the US market. Combined with the previously invested 65 billion US dollars (including the Phoenix, Arizona factory), TSMC's total investment in the United States will reach 165 billion US dollars, making it the largest single foreign direct investment case in US history.

The strategic considerations behind TSMC's investment are mainly reflected in the following aspects:

1. Responding to Tariff Threats: In recent years, the US government has repeatedly threatened to impose high tariffs on chips produced in Taiwan to promote the development of its domestic semiconductor industry. By building factories in the United States to produce chips, TSMC can effectively avoid tariff risks and ensure the market competitiveness of its products.

2. Meeting Customer Demands: TSMC's major customers, such as NVIDIA and Apple, are US tech giants with an increasing demand for advanced chips. Building factories in the United States can shorten the supply cycle, improve response speed, and better meet customer demands.

3. Diversifying Production Bases: By building factories in the United States, TSMC can achieve a diversified production base layout, reducing the risk of dependence on a single market. At the same time, this also helps TSMC expand its business globally and enhance its brand influence.

According to TSMC's announced investment plan, the 100 billion US dollars will mainly be used to build five new semiconductor factories in the United States (including three wafer fabrication plants and two advanced packaging plants) and a research and development center. These factories will adopt advanced manufacturing processes to produce chips for applications in artificial intelligence, smartphones, and other fields.

TSMC's first wafer fabrication plant in Arizona began mass production of 4-nanometer chips in the fourth quarter of 2024. The second wafer fabrication plant is expected to start operations in 2028 and will use even more advanced process nodes. Additionally, TSMC plans to accelerate the construction of its third wafer fabrication plant in Arizona, with a groundbreaking ceremony scheduled for June 2025.

In addition to wafer fabrication plants and packaging plants, TSMC will also establish a research and development center in the United States to attract top global semiconductor talents and promote technological innovation and product development.

TSMC's 100 billion US dollar investment in the United States will have a profound impact on the global semiconductor industry landscape. On the one hand, it will help strengthen the United States' domestic chip manufacturing capabilities and reduce its reliance on overseas supply chains. On the other hand, it will also intensify global semiconductor industry competition, driving technological innovation and industrial upgrading.

However, TSMC's investment in the United States also faces many challenges. Firstly, the construction costs in the United States are much higher than in Taiwan, including higher salaries for engineers, stricter environmental standards, and higher requirements for clean rooms, all of which increase the construction costs. Secondly, American engineers have a lower acceptance of TSMC's "Night Owl Plan" (24-hour shift work), resulting in lower initial yield rates and affecting production efficiency and product quality. Additionally, TSMC's factory construction in the United States also faces geopolitical risks and market uncertainties.

After the news of TSMC's investment of 100 billion yuan in the United States, public opinion is full of crisis and worry. On the one hand, this is seen as another example of the DPP authorities "relying on the United States to seek independence"; On the other hand, it has also raised concerns about the hollowing out of Taiwan's semiconductor industry, worrying about core technology outflow and brain drain.

However, there are also views that TSMC's investment in the United States is an inevitable choice in the context of globalization, helping to enhance the company's international competitiveness and brand influence. At the same time, TSMC will continue to increase investment in Taiwan to promote the development and innovation of the semiconductor industry.