TAIPEI (Taiwan News) — TSMC is reportedly considering three measures to prevent Trump from levying tariffs on the chip maker.
The company’s board of directors will hold its first-ever meeting in the US on Wednesday. Among the reported priorities of the board meeting are ways to convince Trump to back down on his threat to place tariffs on Taiwan-made chips, per Financial Times
TSMC’s management must strike a delicate balance.
On one hand, the company needs to persuade Trump to uphold the Biden administration’s subsidy commitments so its Arizona investment is still viable. On the other, TSMC executives believe relocating too much production to the US would erode the company’s business model and pose significant political challenges in Taiwan.
TSMC managers insist that moving its R&D division to the US or establishing a parallel R&D center are not on the table.
Analysts suggest that one option is a compromise in which TSMC accelerates the timeline for bringing advanced manufacturing to its Arizona facility. A second option could include TSMC committing to additional investments in the US.
TSMC’s first Arizona fab is currently mass-producing 4nm chips, one generation behind Taiwan’s most advanced process. The company has already vowed to bring 2nm manufacturing to the US by 2028, roughly two years after it begins in Taiwan, and plans to have a third Arizona fab operational by 2030.
According to sources familiar with the matter, under a third option, TSMC’s board may also decide to establish advanced packaging capabilities in the US, a critical step in producing cutting-edge chips, which TSMC currently keeps in Taiwan.
This move would deepen TSMC’s commitment to the US while ensuring that Taiwan remains the core of the company’s global chip manufacturing.
Experts say that TSMC’s American customers must help convince the Trump administration that these measures are sufficient to justify dropping the proposed semiconductor tariffs.
Dan Nystedt, vice president at Asia-based private investment firm TriOrient Investments, pointed out to the newspaper that while North America accounted for around 70% of TSMC’s revenue last year, “very few chips go (directly) to the US … most first go to China, India, and other locations, where they are integrated into iPhones and servers before being shipped to the US.”
Nystedt added that TSMC clients “Apple and Nvidia and other chip designers, they would bear the brunt (of chip tariffs).”
