President Donald Trump along with Taiwan Semiconductor Manufacturing’s (TSM) CEO C.C. Wei confirmed the company’s commitment to invest a further $100 billion in the U.S. The investment will come in the form of six chip fabrication plants and several other advanced chip packaging plants. This new investment adds to TSMC’s recent announcement to invest $65 billion in the U.S., taking the total investment to a massive $165 billion.
President Trump is determined to make U.S. into a chipmaking powerhouse and reduce its reliance on other countries for the advanced chips. Trump has been levying heavy tariffs on goods imported from other countries, which seems to have pushed TSMC’s decision to invest in the U.S. At the same time, Wei is excited to manufacture more chips to support the growing AI and smartphone market requirements in the U.S.
Here’s How TSMC’s U.S. Investment will Take Shape
TSMC aims to build three new advanced chip fabrication plants to expand its U.S. manufacturing base. This adds to the two fabrication plants already being built in Arizona and one which is fully operational. Furthermore, TSMC will build two advanced chip packaging facilities that assemble smaller chips into advanced AI systems. TSMC’s plants will strengthen its supply chain technology in the U.S. Notably, some of TSMC’s major customers are from the state, including iPhone maker Apple (AAPL), semiconductor giant Nvidia (NVDA), Advanced Micro Devices (AMD), and Qualcomm (QCOM).
Trump’s “Make in America” Dream Takes Shape
Trump is clearly excited about TSMC’s decision to manufacture and assemble advanced chips in the U.S. This brings him one step closer to his “Make in America” dream. While announcing the news yesterday, Trump said that “this is a tremendous move by the most powerful company in the world. It’s a matter of economic security, it’s also a matter of national security for us.” Taiwan Semi’s geographical location on the World map has been a huge disadvantage for the U.S., as it is closer to rival China, who has been attempting to acquire the country for years.
Trump also mentioned that TSMC’s investment coupled with a few others in the making could help U.S. to capture about 40% of the global chipmaking market. Trump’s AI ambitions have propelled approximately $1 trillion in investments in the U.S. so far. ChatGPT maker OpenAI along with Japan’s Softbank (SFTBY) and Oracle (ORCL) have committed $500 billion through Project Stargate. Moreover, Apple also revealed a $500 billion investment in the U.S. to expand its manufacturing facilities and reduce reliance on China.
Is TSM a Good Stock to Buy?
Wall Street, indeed, remains highly bullish about Taiwan Semi’s stock trajectory. On TipRanks, TSM stock has a Strong Buy consensus rating based on five Buys and one Hold rating. The average Taiwan Semiconductor Manufacturing price target of $245 implies 41.6% upside potential from current levels. In the past year, TSM stock has gained 26.5%.
