TSMC Warns US Tariffs Could Undermine Arizona Investment

TSMC has cautioned the US against imposing tariffs on Taiwanese semiconductors, warning it could jeopardize a $165 billion investment plan in Arizona for semiconductor facilities. The company emphasized that tariffs might increase costs, reduce demand, and create uncertainties in the tech industry, potentially affecting US leadership.

Taiwan Semiconductor Manufacturing Company (TSMC) has issued a warning to the US government regarding potential tariffs on Taiwanese semiconductors. According to Focus Taiwan, TSMC's letter to the US Department of Commerce highlights the potential negative impact of such tariffs on a $165 billion investment in Arizona, intended for building state-of-the-art semiconductor facilities.

The letter stresses that new import restrictions could threaten the current US leadership in the technology industry and inject uncertainty into several ongoing semiconductor projects within the country, including TSMC's own significant investments in Phoenix. TSMC argues that increased costs for end consumers, driven by tariffs, could lead to reduced demand for products containing semiconductors.

Focus Taiwan reports that TSMC's decision to voice concerns marks a shift from the typically quiet stance of Taiwanese entities regarding US tariff policies. The TSMC's investments in Arizona, amounting to $65 billion for three advanced wafer fabs, are central to its strategy, as the first facility is already operational, the second is near completion, and a groundbreaking ceremony for the third has recently been conducted.

In March, TSMC unveiled plans to further invest $100 billion in Arizona over the coming years, aiming to establish additional facilities, including wafer fabs, packaging plants, and a research center. TSMC's letter highlights a significant concern: tariffs that elevate the cost of consumer goods will likely curb demand for semiconductor-reliant products. The company has urged that potential remedial measures exclude downstream end products and semi-finished goods incorporating semiconductors.

The announcement comes amid a reported upsurge in TSMC's revenues for April 2025, driven by increased demand for advanced semiconductor technologies.

(With inputs from agencies.)