Taiwanese companies are planning an additional $20 billion in investments in the United States, driven by strong demand for AI applications, according to Taiwan Economy Minister Kung Ming-hsin. Speaking at the opening of the U.S. pavilion at the SEMICON trade show in Taipei, Kung said Taiwanese companies were 'very actively' investing in the U.S. since May, when Taiwan attended the SelectUSA Investment Summit. The ministry conducted a new assessment of companies aside from major chipmaker TSMC and found this additional investment interest, though specific company details were not disclosed.
The new investment commitments build on TSMC's already substantial US presence, with the company announcing in July a further $100 billion investment in the U.S. state of Arizona. This brings TSMC's total planned investment to $265 billion, which the report describes as the largest foreign direct investment in US history. Even after these plants are fully operational, TSMC expects approximately 30% of its most advanced capacity to remain in Arizona, with much of that advanced manufacturing still years away from completion.
Commerce Secretary Howard Lutnick confirmed to CNBC that the Trump administration is developing a semiconductor tariff framework that would provide relief to companies investing in US chip manufacturing capacity. The proposed policy would create a 'build here, don't pay' structure, where foreign companies could receive tariff exemptions in exchange for investing in American chip production facilities. The administration has been preparing these semiconductor tariffs for some time, though specific rates and scope have not been publicly detailed. As reported by POLITICO, the proposed tariff policy could extend beyond semiconductor chips to products that use them, including laptops, gaming consoles, and data-center servers.
The increased investment interest reflects the 'extremely lively' AI and chip orders that are driving this investment surge, according to Minister Kung. A U.S. Commerce Department official who oversees the government programme to boost domestic semiconductor manufacturing, called the CHIPS Act, welcomed the announcement. The U.S. has pushed Taiwanese technology companies to ramp up their investments as part of a broader effort to increase domestic semiconductor manufacturing capacity. Despite occasional criticism from President Trump regarding Taiwan's semiconductor business, Taiwan's government says this perception is unfair as it has backed its companies to increase their U.S. investments.
The semiconductor tariff consideration reflects broader administration tensions between increasing domestic chip production and maintaining US leadership in artificial intelligence. The framework could still change in the coming weeks or months as discussions continue. The policy aims to incentivize foreign companies to establish manufacturing presence in the United States while protecting domestic semiconductor interests. As reported by POLITICO, citing eight people familiar with the discussions, the administration was also considering a phase-in period for the tariff implementation, with the Commerce Department's Bill Frauenhofer noting these projects will 'strengthen critical technology capabilities in the U.S. and advance innovations that will shape our collective future for decades to come.'
