TSMC Remains Optimistic About Arizona Chip Plant Support Under Trump Administration

Taiwan Semiconductor Manufacturing Co. (TSMC) expresses confidence in receiving unwavering U.S. government backing for its Arizona chip manufacturing plants despite Donald Trump’s critical comments regarding Taiwan's semiconductor sector.

Recent Developments: TSMC's Chief Financial Officer, Wendell Huang, revealed in a CNBC interview that the company has already obtained the initial $1.5 billion from the pledged $6.6 billion under the CHIPS Act. This funding is part of the larger $53 billion initiative from the Biden administration aimed at bolstering domestic semiconductor production.

Huang remarked, "We have already received the first batch of government support in the fourth quarter, and future financial aid will be allocated based on the completion of construction and production milestones."

TSMC's optimistic outlook persists even amidst Trump's campaign assertions that Taiwan has 'stolen' a significant portion of the U.S. chip market, as well as critiques of the CHIPS Act’s expenses. Nevertheless, industry analysts predict that this pivotal program is likely to continue under Trump's administration, given its strong bipartisan endorsement.

TSMC’s investment in Arizona, exceeding $65 billion for three manufacturing facilities, is vital to reinforcing U.S. semiconductor production capabilities. The first major fabrication facility in Arizona commenced advanced chip production by the end of 2024, with another plant anticipated to become operational in 2028.

Further Insights: During TSMC's recent earnings call, CEO C.C. Wei highlighted the company’s long-standing and positive relationships with U.S. government entities. He noted that TSMC achieved record profits in the fourth quarter, driven largely by burgeoning demand for AI chips. Although Wei did not attend Trump’s inauguration, he reassured investors of ongoing and open dialogues with both the current and upcoming administrations regarding future collaboration.

Challenges do remain for TSMC in its U.S. expansion efforts, including extended timelines due to regulatory procedures and a shortage of skilled labor. However, Wei conveyed confidence that TSMC could achieve the same high-quality standards at its Arizona plants as it does in Taiwan.

In light of these developments, TSMC anticipates its revenue from AI-related products to double by 2025, following a projected tripling in 2024. This growth underscores the strategic value of its U.S. operations in meeting the surging demand for advanced chips.

In a related statement from July, Trump suggested that Taiwan should contribute to its own defense costs, adding, "I respect the people of Taiwan greatly, but they did take about 100% of our chip business. I believe Taiwan should pay us for defense."

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