TAIPEI (Taiwan News) — Taiwan Institute of Economic Research researcher Liu Pei-chen (劉佩真) said Tuesday that TSMC’s NT$3.29 trillion (US$100 billion) investment in the US will not weaken Taiwan’s power as a chip manufacturing leader.

Announced by US President Donald Trump and TSMC Chairman and CEO C.C. Wei (魏哲家) on Monday, the investment calls for building three chip fabs, two advanced packaging plants, and an R&D center in the US. Trump said this investment would prevent high tariffs on chips exported to the US.

Liu said TSMC’s investment is bigger than expected, likely meeting Trump’s demands. The move has pros and cons, per CNA.

First, TSMC is not buying out Intel as rumored but making an independent investment. This move allows it to maintain an edge over competitors Intel and Samsung, strengthen ties with US clients, and leverage US resources such as water, electricity, and land, Liu said.

However, TSMC’s expanded US presence will dilute Taiwan’s semiconductor production, particularly in advanced processes. Liu estimated that as the chipmaker’s Arizona fabs begin mass production, Taiwan’s share of semiconductor manufacturing may gradually decrease to 75%-80%.

Liu added that TSMC will also face challenges in cost management, adapting to US work culture, and securing semiconductor talent. Still, she emphasized that Taiwan’s comprehensive supply chain, clustering advantages, and lower labor costs will ensure that it remains the main hub for TSMC’s advanced manufacturing and packaging.

Taishin Securities Investment Advisory Deputy General Manager Huang Wen-ching (黃文清) said the key issue now is how TSMC manages its overseas construction costs, per CNA.

The market is concerned that the higher manufacturing costs in the US could impact profitability, making cost control a major challenge for TSMC. While this may cause short-term stock price fluctuations, TSMC’s global leadership in AI-related technologies ensures long-term potential, he added.