Taiwan Semiconductor Breaks Ground On Third Arizona Plant Without US Subsidies Amid Trump Tariff Threat

Taiwan Semiconductor Manufacturing Co TSM broke ground on its third semiconductor manufacturing fab in Arizona on Tuesday in the presence of U.S. Secretary of Commerce Howard Lutnick.

The Taiwanese contract chipmaker’s Chair and CEO, Dr. C.C. Wei, called it the most significant foreign investment in U.S. history.

In March, Wei announced plans to invest an additional $100 billion in U.S. plants, which could create 40,000 construction jobs over the next four years, tens of thousands of high-paying, high-tech jobs, and drive over $200 billion in indirect output across Arizona in the coming decade.

Also Read: Intel Ramps Up New Chip Tech To Take On Taiwan Semiconductor’s Global Lead

The spending adds to $65 billion in planned Taiwan Semiconductor investments in the U.S.

Lutnick has hinted at the possible dumping of Chips Act grants, which the Biden administration launched to canvass the chipmakers to focus on consolidating domestic semiconductor position to reduce reliance on Asian countries, Bloomberg reported Wednesday.

Lutnick told CNBC on Tuesday that the Trump administration’s tariff policies attracted an additional $100 billion in investment.

The investment followed Trump’s verbal attacks on Taiwan “for stealing” the U.S. semiconductor business and generating massive trade deficits for Washington.

Wei, on an earnings call in April, said that the construction of the second plant in Arizona was complete. The company previously said that the first factory started commercialization in the fourth quarter of 2024.

Wei said 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.

Taiwan Semiconductor stock fell over 18% year-to-date. The chipmaker’s Arizona facility incurred a loss of ~14.3 billion New Taiwan dollars ($441 million) in 2024, marking its most significant loss since its establishment.

The U.S. losses reflect the repercussions of Washington’s attempt to restructure global semiconductor supply chains through political intervention.

The Arizona factory’s dependence on importing key components and raw materials drives logistics costs and extends the supply cycle. Additionally, high labor costs in the U.S. further inflate per-unit labor expenses.

Price Action: TSM stock traded higher by 0.76% to $165.67 at the last check on Wednesday.

Read Next:

• Taiwan Semiconductor To Begin Production Of Advanced 1.4nm Chips In 2028

Photo by Sundry Photography on Shutterstock