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TSMC Warns US Over Chip Import Tariffs

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May 23, 2025

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Taiwanese foundry chip maker TSMC has issued a warning to the administration of President Trump regarding the potential impact of import tariffs on chips. The company stated that if the US imposes such tariffs, or fails to provide an exemption, it may need to reconsider its plan to build six wafer fabs in Arizona. The warning was conveyed through a letter submitted to the US Department of Commerce in response to inquiries about applying tariffs on foreign-made chips to promote domestic chip manufacturing.

In the letter, TSMC expressed concerns about the uncertainty of timelines and the potential financial challenges that could hinder the execution of its ambitious Arizona project. To address these issues and facilitate investments like TSMC Arizona, the company suggested that the administration exempt TSMC Arizona and other firms committed to semiconductor manufacturing projects in the US from tariffs or import restrictions.

Following the closure of the public comment period, an announcement on chip tariffs is anticipated in the coming months. TSMC emphasized the adverse effects that import tariffs on chips could have on markets and the demand for chips produced at its first Arizona fab, which commenced operations in 2024. Construction of a second fab is underway, with plans for a third.

CC Wei, the chairman and CEO of TSMC, previously pledged to invest an additional US$100 billion on top of the existing US$65 billion for expanding operations in the US. This investment aims to establish six wafer fabs, two advanced packaging plants, and an R&D center. T.C. Morris Cheng, Secretary of TSMC Arizona Corp., highlighted the significance of the Arizona project in advancing chip manufacturing and re-skilling the US workforce in semiconductor production.

In the letter to the DoC, Cheng underscored the importance of maintaining sourcing options for leading US companies and avoiding measures that could limit production costs and reduce product demand. He warned that imposing additional tariffs on semiconductors could impact the profitability of US firms, potentially affecting their ability to fund future R&D efforts and maintain market leadership.

Cheng concluded by respectfully urging the administration to refrain from imposing tariffs or restrictive measures on semiconductors produced outside the US. The letter from TSMC conveys a clear message to the Trump administration, emphasizing the potential negative consequences of chip tariffs and the importance of supporting the semiconductor industry to sustain technological advancement and market competitiveness.

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