Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona.
“New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce.
TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s administration, which launched an investigation under Section 232 of the Trade Expansion Act of 1962.
Photo: An Rong Xu, Bloomberg
TSMC on Thursday confirmed that TSMC Arizona Corp, its US subsidiary, made the comments in the letter dated May 5, but it declined to elaborate on the letter’s contents.
Taipei and Taiwanese companies have been reluctant to voice criticism of the Trump administration’s chaotic tariff rollout, but the TSMC letter made the case that going through with the levies would have negative consequences.
TSMC said in the letter that any import measures adopted by the US government “should not create uncertainties for existing semiconductor investments,” referring to its large investments in Arizona.
TSMC is investing US$65 billion to build three advanced wafer fabs in Arizona. The first facility has begun mass-producing chips, while construction of the second fab is nearly complete and a groundbreaking ceremony was held for the third plant last month.
In March, TSMC pledged an additional US$100 billion of investment in Arizona to build three more wafer fabs, two packaging and testing plants and a research-and-development center to bring the total investment to US$165 billion.
The successful and timely completion of its Arizona project depended on the company’s expectation of growing demand for its production manufacturing capacity and services from its leading US customers, TSMC said in the letter.
However, “tariffs that raise the cost of end consumer products will lower demand for such products and the semiconductor components they contain,” the chipmaker said.
“Therefore, TSMC respectfully requests that any remedial import measures imposed resulting from this investigation not extend to downstream end products and semi-finished products containing semiconductors,” it said.
In terms of quantity and quality, a considerable amount of imported semiconductor manufacturing equipment and materials are not currently available in the US market, it said.
Any project designed to accelerate the development of semiconductor production clusters in the US, such as its Arizona plan, would be critical to creating the demand necessary for further supply chain investments and producing more equipment and materials domestically in the US, the company said.
“At a minimum, any tariffs or other import restrictions should be imposed with realistic adjustment times for TSMC Arizona and other US businesses and investors who have already committed to substantial US semiconductor production,” it said.
“This would include ensuring continued tariff-free access to inputs where local sourcing is unavailable or unfeasible or will take time to onshore, particularly from longstanding suppliers within the ecosystem,” it added.
After its project is fully online, TSMC Arizona is expected to roll out 100,000 wafers a month, “making it a GIGAFAB cluster,” it said.
Arizona would eventually account for about 30 percent of the company’s total global capacity of sophisticated 2-nanometer process and more advanced technology nodes, TSMC said.
Trump has threatened to impose tariffs of up to 100 percent on semiconductors from Taiwan, repeatedly claiming Taipei “stole” the chip business from Washington.
Although the Trump administration has said it was negotiating dozens of deals with countries threatened with high tariffs, it has since said it did not have the capacity to complete such deals and would therefore simply tell trading partners the tariff rates applied to their goods.
Intel Corp yesterday reinforced its determination to strengthen its partnerships with Taiwan’s ecosystem partners including original-electronic-manufacturing (OEM) companies such as Hon Hai Precision Industry Co (鴻海精密) and chipmaker United Microelectronics Corp (UMC, 聯電). “Tonight marks a new beginning. We renew our new partnership with Taiwan ecosystem,” Intel new chief executive officer Tan Lip-bu (陳立武) said at a dinner with representatives from the company’s local partners, celebrating the 40th anniversary of the US chip giant’s presence in Taiwan. Tan took the reins at Intel six weeks ago aiming to reform the chipmaker and revive its past glory. This is the first time Tan
Qualcomm Inc is strengthening its partnerships with Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and original design manufacturers (ODMs) in Taiwan as it expands its presence in the artificial intelligence (AI) computer market, CEO Cristiano Amon said in Taipei yesterday ahead of the annual Computex trade show. “Historically we’ve always been a very big customer of TSMC, and we continue to be,” Amon said during a media Q&A session. “For chip manufacturing, we’re among the largest fabless [semiconductor designers],” he said, noting that Qualcomm, a leading provider of mobile and AI-enabled chipsets, ships about 40 billion components every year, with TSMC being
‘FAILED EXPORT CONTROLS’: Jensen Huang said that Washington should maximize the speed of AI diffusion, because not doing so would give competitors an advantage Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) yesterday criticized the US government’s restrictions on exports of artificial intelligence (AI) chips to China, saying that the policy was a failure and would only spur China to accelerate AI development. The export controls gave China the spirit, motivation and government support to accelerate AI development, Huang told reporters at the Computex trade show in Taipei. The competition in China is already intense, given its strong software capabilities, extensive technology ecosystems and work efficiency, he said. “All in all, the export controls were a failure. The facts would suggest it,” he said. “The US
NEW PRODUCTS: MediaTek has been diversifying its product lines to minimize operational risks as mobile chips remain the company’s biggest revenue source MediaTek Inc (聯發科), the world’s biggest supplier of smartphone chips, yesterday said the tape-out process for its first 2-nanometer chip would take place in September, paving the way for volume production of its most advanced chip, likely to be its next-generation flagship smartphone chip, around the year-end at the earliest. MediaTek has been leveraging advanced process technologies from its foundry partner, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to build its flagship mobile phone chips, a segment it once relinquished and then recovered four years ago as it released its Dimensity series. In the semiconductor industry, a tape-out refers to the
RSS