Taiwan Semiconductor Manufacturing Company (TSMC) is asking the Trump administration not to apply certain tariffs on semiconductors made outside the U.S., even if they are being brought into the country. TSMC is a major global chipmaker based in Taiwan. It is currently building a multibillion-dollar semiconductor factory in Arizona as part of U.S. efforts to boost domestic chip production.
TSMC chips are used in numerous consumer products, such as iPhones, as well as in military applications, including the F-35 fighter jet. Both the Trump and Biden administrations have emphasized the importance of building a domestic microchip industry for both economic and defense purposes.
TSMC sends letter to U.S. Department of Commerce
T.C. Morris Cheng, a representative from TSMC Arizona, sent a letter to the U.S. Department of Commerce on May 5, saying these tariffs could hurt TSMC’s business plans in Arizona. TSMC says it intends to expand its investment to $165 billion in the Grand Canyon State, building six advanced semiconductor fabs, two advanced packaging facilities and an R&D center. They say it is “the largest single foreign direct investment in U.S. history.”
“To allow investments such as TSMC Arizona to proceed expeditiously,” Cheng wrote, “the administration should exempt TSMC Arizona and other companies that have already committed to semiconductor manufacturing projects in the United States from tariffs or other import restrictions.”
Concerns over domestic industry impact
TSMC argues that these tariffs could harm their business plans in Arizona and possibly threaten America’s efforts to build its domestic semiconductor industry. Cheng said the imported taxes and restrictions would make it more expensive to build and run semiconductor plants in the U.S.
“New import restrictions could jeopardize current U.S. leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the U.S., including TSMC Arizona’s significant investment plan in Phoenix,” Cheng wrote. “It is important to note that cutting-edge semiconductors, such as those produced at TSMC Arizona, cannot function alone; they need to work in tandem with other semiconductor components, including varied legacy chips, to unleash their full power and functionality.”
Call for tariff exemption
TSMC is urging the government to exempt the company from these tariffs for some imported chips, allowing their Arizona project to proceed smoothly. TSMC broke ground on its third U.S. facility in Phoenix, Arizona, in April.
