Taiwan will invest $250 billion in U.S. chipmaking in new trade deal
There is the USA and Taiwan reached A trade agreement to build chips and chip factories on American soil, Ministry of Commerce It was announced on Thursday.
Under the agreement, Taiwanese chip and technology companies will invest at least $250 billion for production capacity in the United States, and the Taiwanese government will provide $250 billion in loan guarantees to these companies.
In exchange, the United States will cap “reciprocal” tariffs on Taiwan from 20% to 15% and commit to zero reciprocal tariffs on generic drugs, their ingredients, aircraft components, and some natural resources.
Taiwan Semiconductor Manufacturing Co. has purchased land and may expand in Arizona as part of that deal, Commerce Secretary Howard Lutnick said in an interview with CNBC’s Brian Sullivan on Thursday.
“They purchased hundreds of acres adjacent to their property,” Lutnick said. “I will let them complete their board and give them time.”
The announcement added that future tariffs under the Section 232 framework will have some exceptions for companies manufacturing chips at Taiwanese companies building new chip factories in the United States. TSMC — Factories within the scope of the framework will be able to import up to 2.5 times the capacity they built while under construction, without paying customs duty.
Taiwanese auto parts, lumber and related products will also be exempt from customs duties above 15% under Section 232, the announcement said.
Once the factories are completed, companies will be able to import 1.5 times US production capacity, Commerce said.
The deal provides clarity to chip companies and technology firms that have grappled with uncertainty over the past year over the Trump administration’s approach to tariffs on the semiconductor industry.
It also makes clear that it may continue to produce chips for US companies in Taiwan, while encouraging TSMC, the world’s leading fab company, to continue building more factories on US soil.
Taiwan-based chip companies that don’t manufacture in the U.S. would likely face 100% tariffs, Lutnick said during the interview. He said the government’s goal is to bring 40% of Taiwan’s semiconductor supply chain to the United States.
“If they don’t build it in America, that’s what they’re going to get, the tariff is probably going to be 100%,” Lutnick said.
TSMC has already built factories in Arizona and invested as much as $40 billion to produce chips in companies such as Apple And NvidiaUsing previous grants from the U.S. government under the CHIPS Act.
As the fight for access to AI semiconductors has become a major geopolitical issue, the US government has prioritized America’s cutting-edge chip production.
US officials also said that this situation would pose a significant risk to the US economy. china invaded Taiwan and TSMC are reducing access to their chips.
“We will do it all over again to become self-sufficient in semiconductor manufacturing capacity,” Lutnick said.
